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OCT    8    1914          (  UNIVERSITY  } 


HOUSE  No.  1926 


Commontoealtj)  of  s@a00acfM0etts, 


BOARD  OF  EDUCATION. 


SPECIAL   REPORT   ON   TEACHERS'   RETIREMENT 
ALLOWANCES. 


To  the  Honorable  Senate  and  House  of  Representatives. 

In  accordance  with  chapter  47  of  the  Resolves  of  1911,  concern- 
ing the  advisability  of  providing  a  retirement  allowance  for  teach- 
ers, the  Board  of  Education  respectfully  submits  herewith  the 
results  of  its  investigations,  together  with  recommendations. 

FREDERICK  P.  FISH,  Chairman, 
SARAH  LOUISE  ARNOLD, 
ELLA  LYMAN  CABOT, 
SIMEON  B.  CHASE, 
LEVI  L.  CONANT, 
THOMAS  B.  FITZPATRICK, 
FREDERICK  W.  HAMILTON, 
PAUL  H.  HANUS, 
CLINTON  Q.  RICHMOND, 

Members  of  the  Board. 


LI- 

. 

2  RETIREMENT  ALLOWANCES.  [Jan. 

I. 

INTRODUCTION. 

This  report  is  made  in  compliance  with  chapter  47  of  the  Re- 
solves of  1911  which  reads:  — 

Resolved,  That  the  board  of  education  is  hereby  requested  to  investigate 
the  advisability  of  providing  a  retirement  allowance  for  teachers  who  have 
taught  in  the  public  schools  of  the  Commonwealth  for  thirty-five  years, 
and  the  amount  and  times  of  payment  of  such  allowances.  The  board  is 
further  requested  to  report  the  result  of  its  investigation  to  the  general 
court,  with  such  recommendations  as  it  may  deem  expedient,  either  in 
its  annual  report  or  separately,  not  later  than  the  fifteenth  day  of  January, 
nineteen  hundred  and  thirteen. 

The  Commissioner  of  Education  was  directed  to  make  the  neces- 
sary investigations  and  submit  the  materials  for  this  report.  In 
this  work  he  was  aided  by  Charles  A.  Prosser,  formerly  deputy 
commissioner  of  the  Board,  and  W.  I.  Hamilton,  agent  of  the 
Board. 

Consideration  has  been  given  to  legislation  already  enacted  in 
Massachusetts  relating  to  teachers'  pensions  and  annuities.  The 
experience  of  other  States  and  of  foreign  countries  has  been  taken 
into  account.  Statistical  data  as  to  the  age,  salary,  training  and 
terms  of  service  within  the  State  and  without  the  State  have  been 
secured  for  almost  all  the  teachers  of  Massachusetts.  Conferences 
have  been  held  with  representatives  of  teachers'  organizations  and 
with  others  interested  with  a  view  to  procuring  suggestions  as  to 
the  principles  and  aims  to  be  kept  in  view  in  making  recommenda- 
tions relative  to  retirement  allowances  for  teachers. 

Existing  legislation  providing  for  the  payment  of  retiring  allow- 
ances to  the  employees  of  the  Commonwealth  has  been  examined 
and  also  the  statute  permitting  towns  and  cities  to  provide  for 
the  retirement  of  municipal  employees'.  Helpful  suggestions  in 
this  connection  have  been  received  from  F.  Spencer  Baldwin. 

It  became  apparent,  early  in  the  inquiry,  that  the  provision  for 
retirement  allowances  for  public  school  teachers  who  are  now  in 
service  involves  certain  considerations  not  pertinent  in  the  case 
of  those  persons  who  may  hereafter  become  teachers. 

In  the  case  of  the  latter,  provision  might  easily  be  made  for 
their  compulsory  participation  in  a  retirement  plan  involving  con- 


1913.]  HOUSE  — No.  1926.  3 

tributions  from  their  salaries.  In  the  case  of  teachers  already  in 
the  service,  the  extent  to  which  it  would  be  advisable  or  just  to 
insist  on  compulsory  participation  is  not  clear.  Provision  for 
compulsory  certification  might  justly  be  required  of  teachers  yet 
to  enter  the  service;  whereas,  for  some  teachers  who  have  already 
been  employed  such  a  provision  might  operate  as  an  undue  hard- 
ship. A  number  of  teachers  now  in  the  service  are  members  of 
retirement  associations  maintained  in  whole  or  in  part  by  public 
funds.  They  have  thus  accrued  interests  in  prospective  retire- 
ment allowances  which  should  not  be  disturbed,  except  at  their 
own  wish.  Teachers  hereafter  entering  the  service  could  without 
hardship  be  required  to  become  members  of  a  State  retirement 
system  and  could  be  debarred  from  securing  membership  in  other 
retirement  associations  aided  by  public  funds. 
|:  Of  teachers  now  in  service  there  is  obviously  more  than  one 
class,  as  considered  with  reference  to  participation  in  a  retirement 
system.  Teachers  under  thirty  years  of  age  could,  if  they  elected 
to  become  members,  make  the  contributions  necessary  to  full  par- 
ticipation in  retiring  allowances  on  substantially  the  same  terms 
as  might  be  required  of  teachers  hereafter  entering  the  service. 
Where  teachers  are  upward  of  thirty  years  of  age  modifications 
would  probably  be  necessary  in  the  application  of  the  principle  of 
contribution.  A  limited  number  of  teachers  who  are  upward  of 
sixty  years  of  age  are  in  the  service  of  the  Massachusetts  public 
schools,  and  these  also  constitute  a  class  by  themselves.  Of  these 
teachers  little  could  probably  be  expected  in  the  way  of  contribu- 
tions towards  a  system  of  retiring  allowances. 

As  a  result  of  the  foregoing  considerations  the  Board  has  found 
it  expedient  and  desirable  to  submit  recommendations  separately  as 
regards  each  of  the  classes  discussed.  In  order  to  make  possible  a 
full  consideration  of  the  principles  underlying  a  desirable  policy  of 
providing  retirement  allowances  for  teachers,  the  Board  submits 
in  detail  recommendations  relative  to  a  retirement  system  which 
is  designed  to  be  compulsory  upon  teachers  entering  the  service 
of  the  public  schools  of  the  Commonwealth  after  a  stated  date. 
With  reference  to  teachers  now  in  the  service,  the  Board  also  sub- 
mits for  consideration  a  variety  of  suggestions  and  recommenda- 
tions which  should,  in  the  opinion  of  the  Board,  receive  attention 
after  the  fundamental  principles  embodied  in  the  first  recom- 


4  RETIREMENT  ALLOWANCES.  [Jan. 

mendations  shall  have  been  carefully  scrutinized.  The  Board  is 
prepared  when  called  upon  to  submit  such  bills  as  may  be  desired 
in  connection  with  each  of  the  classes  under  consideration. 

The  following  are  in  brief  the  findings  and  recommendations  of 
the  Board :  — 

I.  The  enactment  of  legislation  providing  for  the  payment  of 
retirement  allowances  to  public  school  teachers  after  specified 
terms  of  service  would  tend,  in  the  opinion  of  the  Board,  to  pro- 
mote the  efficiency  of  the  teaching  force  of  the  public  schools  and 
to  improve  public  education  for  the  following  reasons:    (a)  per- 
sons of  superior  ability  would  be  encouraged  to  enter,  and  to 
remain  in,  the  profession  of  teaching;    (b)  teachers  during  their 
terms  of  service  would  have  a  greater  feeling  of  security  with 
regard  to  the  future;    (c)  school  authorities  would  be  enabled  to 
retire  without  hardship  teachers  who,  on  account  of  age,  had 
become  incapacitated. 

II.  The  Board,  therefore,  recommends  the  enactment  of  legis- 
lation establishing  an  old-age  retirement  system  for  teachers  in 
publicly  supported  schools,  membership  in  which  shall  be  com- 
pulsory upon  all  persons  who  shall,  after  July  1,  1914,  begin  to 
teach  in  schools  supported  by  public  taxation,  and  membership 
in  which  shall  be  voluntary  for  teachers  now  in  service. 

III.  Teachers  in  the  public  schools  and  schools  established 
under  the  provisions  of  chapter  471  of  the  Acts  of  1911,  are  tech- 
nically the  employees  of  the  towns  and  cities  in  which  they  teach, 
but  in  many  respects  their  services  may  be  regarded  as  being 
rendered  to  the  Commonwealth  as  a  whole,  since  educational 
standards  are  in  general  prescribed  by  State  laws  and  because  the 
Board  of  Education  is  authorized  in  part  to  supervise  such  edu- 
cation and  to  promote  its  efficiency.     Public  education  is,  in  large 
degree,  the  concern  of  the  Commonwealth  as  a  whole.     Local 
retirement  systems  are  not,  and,  in  the-  opinion  of  the  Board,  can- 
not be  effective  except  in  large  cities.     The  Board  is  of  the  opinion 
that  an  adequate  retirement  system  for  the  public  school  teachers 
of  Massachusetts  should  necessarily  operate  uniformly  through- 
out the  State  as  a  whole.     For  these  reasons  it  is  expedient  and 
desirable  that  the  cost  of  maintaining  a  retirement  system  for 
teachers  should  be  met  in  part  out  of  the  State  treasury.     Such 
a  retirement  system  should,  furthermore,  be  administered  under 
the  supervision  of  the  Commonwealth. 


1913.]  HOUSE  — No.  1926.  5 

IV.  A  retirement  system,  designed  to  advance  the  efficiency  of 
teaching,  while  at  the  same  time  preserving  to  the  utmost  as  far 
as  possible  the  self-respect  on  the  part  of  those  participating 
therein,  should  be  supported  in  part  by  contributions  from  the 
prospective  beneficiaries.  Such  a  system  then  becomes  in  effect 
a  form  of  compulsory  insurance  against  loss  of  earning  power  due 
to  old  age,  towards  the  cost  of  which  the  State  makes  partial 
contributions.  The  Board,  therefore,  recommends  that  in  any 
legislation  providing  for  retirement  allowances  for  teachers  there 
be  included  a  provision  to  the  effect  that  from  the  salaries  of 
teachers  who  are  to  benefit  from  such  allowances  there  shall  regu- 
larly be  deducted  such  a  percentage  as  will  provide  substantially 
one-half  the  cetirement  allowances  called  for. 

II. 
GENERAL  CONSIDERATIONS. 

The  meaning  of  the  phrases  "retirement  system"  and  "retire- 
ment allowance"  is  already  familiar  to  the  citizens  of  Massachu- 
setts. Pension  systems  had  been  established  by  law  for  various 
classes  of  State  and  municipal  employees  before  general  legisla- 
tion was  enacted  establishing  a  retirement  system  for  all  State 
employees  not  already  provided  for  (chapter  532  of  the  Acts  of 
1911).  Towns  and  cities  are  also  permitted  to  adopt  general 
retirement  systems  for  their. employees  (chapter  619,  Acts  of  1910, 
and  chapter  338,  Acts  of  1911). 

The  payment  of  pensions  constitutes  the  oldest  and  best  known 
form  of  providing  for  the  support  of  public  employees  obliged  to 
withdraw  from  active  service.  It  is  customary  in  many  countries 
to  retire  soldiers,  firemen  and  other  classes  of  civil  and  military 
employees  with  pensions.  In  the  continental  countries  of  Europe 
teachers  have  long  been  among  those  eligible  for  pensions. 

The  cost  of  a  pension,  strictly  so  called,  is  met  entirely  by  the 
State  or  other  employing  authority.  The  beneficiary  makes  no 
direct  contribution  towards  it,  when  many  classes  of  public  em- 
ployees are  enabled  by  legislation  to  share  in  it.  The  cost  of  a 
pension  system  to  the  State  becomes,  therefore,  very  great.  It  is 
also  believed  that  in  many  cases  the  fact  that  an  employee  is  cer- 
tain to  receive  a  pension  on  retirement  from  active  service  tends 
to  develop  a  disposition  to  neglect  the  making  or  proper  provision 
for  the  future  out  of  his  own  earnings. 


6  RETIREMENT  ALLOWANCES.  [Jan. 

Because  of  a  recognition  of  these  conditions  a  more  compre- 
hensive plan  of  providing  for  the  retirement  of  superannuated  or 
disabled  employees,  public  and  private,  which  at  the  same  time 
promotes  thrift  and  the  maximum  self-respect  on  the  part  of  such 
employees,  has  been  developed  in  recent  years,  especially  in  Ger- 
many, France,  England  and  in  some  American  States.  The  vari- 
ous measures  designed  to  accomplish  the  purposes  here  described 
are  comprehended  under  the  term  "social  insurance." 

The  principles  of  social  insurance  are  substantially  these:  by 
means  of  State  legislation  and  under  State  administration,  or  at 
least  supervision,  designated  classes  of  persons  are  required  to 
insure  themselves  against  loss  or  decrease  of  earning  power  due 
to  age,  accident,  invalidity  or  other  similar  contingencies.  The 
person  insured  is  required  to  make  contributions  in  amounts  vary- 
ing according  to  circumstances  towards  meeting  the  cost  of  this 
insurance;  and  he  also  shares  in  a  measure  in  the  administration 
of  the  funds  established  for  that  purpose.  That  part  of  the  cost 
of  the  insurance  which  is  not  met  by  the  contribution  of  those 
insured  is  usually  provided  by  the  State  and  by  the  employing 
authority  in  shares  varying  according  to  conditions  existing  in 
the  employment. 

The  general  act  (chapter  532  of  the  Acts  of  1911),  making  pro- 
vision for  the  retirement  of  Massachusetts  State  employees,  em- 
bodies the  principles  of  social  insurance.  State  employees  not 
already  in  receipt  of  pensions  are  required  to  form  an  association 
in  which  membership  is  voluntary  for  those  in  the  service  at  a 
specified  date,  but  compulsory  on  all  those  entering  such  service 
after  that  date.  All  members  of  the  association  are  required  to 
contribute  stated  percentages  of  their  salaries  towards  the  sup- 
port of  the  retirement  system.  To  the  sums  earned  by  the  con- 
tributions of  employees  the  State  adds  an  equal  amount,  thus 
making  suitable  retirement  allowances  for  those  who  become 
superannuated.  The  retirement  association  and  the  State  share 
in  the  administration  of  the  system  thus  established. 

The  question  as  to  whether  teachers  in  the  public  schools  should 
be  enabled  to  receive  retirement  allowances  has  been  long  before 
the  public.  As  already  noted,  public  school  teachers  in  conti- 
nental European  countries  have  for  many  years  received  pensions 
or  retiring  allowances  on  much  the  same  basis  as  other  civil  em- 


1913.]  HOUSE  — No.  1926.  7 

ployees.  Twenty  States  in  America  now  have  legislative  provi- 
sions of  some  sort  permitting  or  requiring  the  payment  of  retiring 
allowances  to  teachers.  Five  States  —  Rhode  Island,  New  York, 
New  Jersey,  Maryland  and  Virginia  —  have  such  pension  sys- 
tems applying  uniformly  to  all  teachers  in  public  schools;  in  the 
others,  certain  cities  only  have  made  such  provision  as  is  the 
case  in  Massachusetts  (see  Appendices  C  and  D). 

There  exist  many  reasons  for  believing  that  a  properly  safe- 
guarded retirement  system  for  teachers  operates  to  improve  the 
efficiency  of  the  teaching  service.  The  salaries  paid  teachers  are 
not  large,  as  a  rule,  and  teachers  have  few  opportunities  to  make 
investments  which  are  safe  and  profitable.  School  committees 
often  find  it  difficult  to  retire  aged  teachers,  who  have  obviously 
become  unable  to  render  effective  service,  because  they  have 
inadequate  means  of  self-support. 

It  is  probable  that  the  existence  of  a  retirement  system  for 
teachers  would  have  the  effect  of  inducing  many  persons  to  enter 
the  service  of  the  public  schools  and  to  remain  permanently  in 
the  work  who  are  now  deterred  by  the  prospect  of  being  unable 
to  make  suitable  provision  in  that  calling  for  old  age.  It  is  well 
known  that  the  percentage  of  men  in  the  public  school  service  is 
constantly  diminishing,  —  in  Massachusetts  less  than  8  per  cent, 
of  all  the  persons  engaged  in  public  school  teaching  or  supervision 
are  men.  Many  men  who  follow  teaching  for  a  few  years,  or  who 
might  be  disposed  to  find  here  a  career,  and  who  are  well  suited 
by  temperament,  native  ability  and  training  for  the  work,  seek 
other  lines  of  employment  in  the  belief  and  expectation  that  the 
monetary  returns  in  these  will  be  sufficient  to  enable  them  to 
retire  with  a  competence  sufficient  for  the  needs  of  old  age.  Men 
of  the  character  here  described  are  not  often  disposed  or  able  to 
give  the  close  and  prolonged  attention  to  financial  matters  re- 
quired, if  a  small  income  is  to  be  so  invested  as  to  yield  a  safe  and 
fairly  profitable  return.  But  if  the  future  were  measurably  as- 
sured, it  is  possible  that  many  of  these  would  render  excellent 
service  in  education. 

Again,  many  teachers  are,  under  present  conditions,  unable  to 
render  the  best  service  of  which  they  are  capable  because  of 
apprehensions  regarding  the  future.  This  statement  applies  with 
especial  force  to  women  teachers  who  are  earning  salaries  only 


8  RETIREMENT  ALLOWANCES.  [Jan. 

large  enough  to  meet  their  daily  needs.  It  is  highly  probable 
that  one  effect  of  a  general  retirement  system  would  be  to  give 
these  persons  greater  confidence  in  the  future  and  thus  to  stimu- 
late them  to  better  work  and  a  more  active  interest  in  self-im- 
provement. 

Legislation  was  enacted  many  years  ago  in  Massachusetts, 
making  possible  the  existence  of  teachers'  annuity  guilds.  By 
special  acts  certain  cities  have  been  enabled  to  contribute  towards 
teachers'  retirement  systems,  and,  under  stated  conditions,  to 
retire  teachers.  In  1908  a  general  law  was  enacted  permitting 
towns  and  cities  under  certain  specified  conditions  to  retire  super- 
annuated teachers. 

But  outside  of  the  city  of  Boston  the  legislation  here  described 
has  had,  as  yet,  comparatively  little  effect.  Few  towns  or  cities 
have  taken  advantage  of  the  provisions  of  chapter  498  of  the 
Acts  of  1908,  asserting  that  their  financial  resources  are  insuffi- 
cient for  this  purpose.  Teachers'  annuity  guilds,  while  serving 
a  very  useful  purpose  in  making  provision  for  systematic 
saving  among  teachers,  are  not  popular  with  younger  teachers, 
many  of  whom  do  not  contemplate  making  of  teaching  a  life- 
career. 

The  demand  for  a  State-wide  retirement  system  for  teachers  of 
the  public  schools  has  grown  steadily,  and  a  large  number  of  citi- 
zens are  convinced  that  the  establishment  of  such  a  system  would 
be  consistent  with  the  other  efforts  of  the  State  to  promote  a 
sound  policy  of  public  education.  The  Board  of  Education  is 
convinced  that  the  time  has  arrived  when  the  Legislature  should 
give  the  entire  subject  careful  consideration.  It  is  obvious  that 
the  establishment  of  a  retirement  system  will  ultimately  require 
on  the  part  of  the  State  or  of  the  local  community  substantial 
expenditures  for  its  support.  Such  expenditure  should  be  re- 
garded as  a  part  of  the  necessary  cost  of  an  adequate  system  of 
public  education. 

A  careful  examination  of  the  methods  and  results  of  providing 
retirement  allowances  for  teachers  in  other  States  and  countries, 
and  of  the  conditions  peculiar  to  Massachusetts,  leads  the  Board 
to  the  conclusion  that  if  general  legislation  is  to  be  enacted  pro- 
viding for  the  payment  by  the  State  or  local  community  of  retire- 
ment allowances  to  superannuated  teachers,  such  legislation 


1913.]  HOUSE  — No.  1926.  9 

should  be  based  on  the  general  principles  of  social  insurance  as 
given  effect  in  the  act  providing  retirement  allowances  for  State 
employees. 

Furthermore,  although,  strictly  speaking,  teachers  are  the  em- 
ployees of  the  local  community  rather  than  of  the  Commonwealth, 
conditions  exist  which  render  it  desirable  and  necessary  that  pro- 
vision should  be  made  whereby  contributions  shall  be  made  from 
the  treasury  of  the  Commonwealth  towards  meeting  in  part 
the  cost  of  any  teachers'  retirement  system  that  may  be  estab- 
lished. 

In  the  event  of  the  enactment  <5f  legislation  looking  to  the  estab- 
lishment of  a  State-wide  retirement  system  for  teachers,  the  Board 
recommends  that  such  legislation  be  based  upon  the  following 
principles :  — 

1.  A  retirement  association  should  be  created  by  law,  to  be 
composed  of  all  teachers  or  others  required  or  electing  as  pre- 
scribed to  share  in  the  obligations  and  benefits  of  the  State  re- 
tirement  system.    Membership   in   this   association   should   be 
obligatory  upon  all  teachers  beginning  work  in  the  public  schools 
of  Massachusetts  after  a  stated  date,  and  should  be  optional  in 
the  case  of  all  teachers  who,  prior  to  that  date,  shall  have  been 
engaged  in  teaching  in  the  public  schools. 

2.  Members  of  the  retirement  association  who  have  reached  a 
stated  age  should  be  eligible  to  retire  and  to  receive  the  full  retire- 
ment allowance  to  which  in  each  case  their  contributions  entitle 
them;   and  school  committees  should  be  empowered  similarly  to 
retire  members  wrho  shall  have  reached  a  specified  age. 

3.  The  expense  of  providing  retirement  allowances  for  teachers 
should  be  shared  in  equal  proportions  by  the  State  and  by  the 
members  of  the  retirement  association,  the  State  making  annual 
contributions  for  this  purpose  when  necessary,  and  the  members 
of  the  retirement  association  being  assessed  a  fixed  percentage  of 
their  salaries.     Provision  should  be  made  for  minimum  and  maxi- 
mum limits  on  the  contributions  of  members. 

4.  Members  of  the  retirement  association  withdrawing  from 
public  school  service,  before  becoming  eligible  for  a  retirement 
allowance,  should  be  enabled  to  receive  from  the  retirement  fund 
an  amount  equal  to  their  total  contributions,  increased  by  inter- 
est on  the  same  at  a  stated  rate. 


10  RETIREMENT  ALLOWANCES.  [Jan. 

5.  Members  of  the  retirement  association  should  not  be  al- 
lowed to  be  members  of  any  other  retirement  system  supported 
in  whole  or  in  part  by  funds  raised  by  means  of  taxation. 

If  a  comprehensive  system  of  providing  retirement  allowances 
for  superannuated  teachers  is  to  be  provided  under  the  conditions 
which  prevail  in  Massachusetts,  it  is  necessary  that  the  State 
should  establish  and,  through  properly  constituted  authorities, 
administer  such  a  system.  The  most  effective  means  for  this 
purpose  are  to  be  found  in  the  creation  of  a  retirement  associa- 
tion composed  of  all  persons  eligible  to  share  in  the  benefits  and 
the  responsibilities  of  the  retirement  act.  Through  this  associa- 
tion the  necessary  machinery  of  administration  may  be  established. 
The  precedent  already  existing  in  the  retirement  system  for  State 
employees  appears  to  be  satisfactory  in  this  regard. 

It  requires  no  argument  to  prove  that  teachers  who  have  become 
old  in  the  service  ultimately  reach  a  point  where  they  can  no 
longer  do  efficient  work  in  teaching  the  young.  This  age  varies 
with  individuals.  Experience  proves  that  it  is  desirable  and 
expedient  to  allow  persons  eligible  to  receive  retirement  allow- 
ances to  retire  at  a  specified  age.  The  interest  of  the  service  of 
the  public  schools  also  requires  that  school  committees  should  be 
enabled  to  order  the  retirement  of  teachers  at  a  somewhat  later 
age,  which  would  probably  be  uniform  throughout  the  service. 
The  principle  of  dividing  the  cost  of  maintaining  social  insurance 
between  the  beneficiary  and  the  employing  authority  is  already 
well  established.  The  proportions  here  given  are  those  fixed  in 
the  retirement  act  for  State  employees.  The  Board  regards  this 
as  in  accordance  with  sound  policy. 

The  question  as  to  whether  the  State  or  the  local  community 
should  make  contributions  on  behalf  of  the  employing  authority 
is  open  to  debate.  The  Board  believes  that  under  the  conditions 
which  exist  in  Massachusetts  it  is  desirable  and  necessary  that 
such  contributions  should  be  made  by  the  State.  A  variety  of 
difficult  questions  of  administration  and  law  are  involved  in  any 
plan  requiring  that  local  communities  shall  make  contributions 
to  a  State  retirement  fund,  with  which  it  would  be  difficult  to 
deal. 

In  all  public  service  where  contributions  are  required  from 
employees,  experience  justifies  the  policy  of  returning  such  con- 


1913.]  HOUSE  — No.  1926.  11 

tributions  with  interest  to  an  employee  who  withdraws  from  the 
service  and  ceases  to  be  eligible  to  receive  the  retirement  allow- 
ance. In  the  case  of  teachers  this  is  peculiarly  necessary,  since 
so  large  a  percentage  of  them  withdraw  from  the  service  to  take 
up  other  forms  of  work  before  reaching  the  age  at  which  partici- 
pation in  the  retirement  allowance  becomes  possible. 

The  teachers  of  Boston  and  those  in  a  few  other  towns  or  cities 
of  the  State  are  already  members  of  retirement  systems  assisted 
in  part  or  in  whole  by  public  funds.  Provision  should  be  made 
whereby  such  teachers  electing  to  join  the  State  retirement  asso- 
ciation should  waive  the  accumulation  of  further  benefits  or  rights 
in  local  retirement  systems.  Teachers  hereafter  entering  the 
service  should  not  be  allowed  to  connect  themselves  with  other 
retirement  associations  assisted  by  public  funds.  The  wisdom 
of  this  policy  needs  no  argument. 

III. 

ESSENTIAL  PRINCIPLES. 

The  following  are  the  essential  features  of  a  proposed  act  (see 
Appendix  A)  providing  for  the  establishment  of  retirement  allow- 
ances for  teachers  beginning  service  in  the  public  schools  after 
July  1,  1914  (definitions  of  terms  used  are  given  in  the  bill). 

7.     Organization. 

Persons  eligible  and  required  to  share  in  the  benefits  and  re- 
sponsibilities of  this  act  shall  constitute  a  retirement  association. 
This  association  shall  annually  elect  a  representative  to  the  State 
Teachers'  Retirement  Fund  Board  (hereafter  known  as  the  Re- 
tirement Board). 

II.     Membership. 

All  teachers  in  schools  supported  in  whole  or  in  part  by  local 
taxation  (including  principals,  supervisors,  superintendents  and 
others)  who  shall  begin  to  teach  in  such  schools*  on  or  after  July 
1,  1914,  and  who  are  under  thirty  years  of  age,  are  required  to 
be  members  of  the  retirement  association  and  to  make  the  pre- 
scribed contributions  thereto. 


12  RETIREMENT  ALLOWANCES.  [Jan. 


777.    Administration. 

There  is  constituted  a  State  Teachers'  Retirement  Fund  Board 
(hereafter  known  as  the  Retirement  Board)  of  seven  members. 

(a)  Three  of  these  shall  be  the  State  Commissioner  of  Insur- 
ance, the  State  Commissioner  of  Banking  and  the  State  Commis- 
sioner of  Education. 

(6)  Three  members  of  this  Board  shall  be  elected  by  the  retire- 
ment association  for  terms  of  three  years  in  accordance  with  a 
plan  to  be  prepared  by  the  State  Commissioner  of  Insurance,  the 
State  Commissioner  of  Banking  and  the  State  Commissioner  of 
Education. 

(c)  The  seventh  member  of  the  association  shall  be  elected 
annually  by  the  other  six  members. 

(d)  Members  of  the  Retirement  Board  shall  receive  no  com- 
pensation; necessary  expenses  and  loss  of  salary  due  to  service  on 
the  Board  shall  be  met  from  the  expense  fund  of  the  Board. 

IV.    Duties  of  the  Retirement  Board, 
(a)  To  elect  a  secretary  at  a  salary. 
(6)  To  execute  the  provisions  of  this  act. 
(c)  To  make  necessary  reports. 

V.    Retirement  of  leathers. 

(a)  Conditions  of  Voluntary  Retirement.  —  In  order  to  be  eligible 
for  voluntary  retirement  a  member  of  the  association  shall  (1)  be 
at  least  sixty-five  years  of  age;  (2)  have  taught  for  thirty  years 
in  the  public  schools  of  Massachusetts;  (3)  and  shall  have  made 
thirty  or  more  annual  payments,  as  required  by  this  act  towards 
the  provision  of  an  annuity. 

(6)  Conditions  of  Compulsory  Retirement  by  School  Committees. 
—  School  committees  may  compel  the  retirement  of  teachers  who 
have  fulfilled  the  requirements  for  voluntary  retirement  and  are 
members  of  the  association. 

(c)  Conditions  for  General  Compulsory  Retirement.  —  A  member 
of  the  association  must  retire  from  public  school  teaching  on 
reaching,  the  age  of  sixty-five  years,  if  a  woman,  and  seventy 
years  if  a  man. 


1913.]  HOUSE  — No.  1926.  13 

VI.    Retirement  Allowances  to  be  paid  by  the  Retirement  Board. 

The  retirement  allowance  to  be  paid  annually  during  his  life- 
time to  each  member  of  the  association  after  retirement  shall 
consist  of  two  parts,  —  the  annuity  and  the  pension. 

(a)  The  annuity  shall  be  such  an  annuity  as  can  be  purchased 
by  the  amount  representing  the  contributions  of  the  member  — 
together  with  accumulated  interest  thereon  —  at  the  time  of 
retirement,  said  amount  and  said  annuity  to  be  determined  by 
the  Retirement  Board.  (6)  The  pension  shall  be  equal  in  amount 
to  the  annuity.  *•* 

VII.  Assessments  on  Salaries  of  Members. 
To  provide  for  the  annuities  required  in  the  act,  each  member  of 
the  association  shall,  in  a  manner  prescribed  by  the  Retirement 
Board,  be  required  to  contribute  a  stated  percentage  of  his  salary; 
the  rate  of  contribution  to  be  determined  from  time  to  time  by 
the  Retirement  Board  and  to  be  uniform  for  all  members,  but  at 
no  time  to  be  less  than  3  per  cent,  nor  more  than  7  per  cent., 
with  the  further  proviso,  however,  that  no  annual  contribution 
shall  be  less  than  $35  nor  more  than  $100. 

VIII.    Refund. 

A  member  of  the  association  resigning  from  service  in  the  public 
schools  before  becoming  eligible  to  the  retirement  allowance  shall 
be  entitled  to  a  refund  of  his  contributions,  together  with  regular 
interest  thereon. 

IX.     Bequest. 

When  a  member  of  the  retirement  association  dies  before  becom- 
ing eligible  for  a  retirement  allowance  his  heirs  shall  be  entitled 
to  the  amount  of  said  member's  contributions  at  the  time  of  his 
death,  together  with  interest  thereon. 

X.    Reinstatement. 

Members  of  the  association  who  shall  have  retired  from  the 
association  and  who  shall  have  withdrawn  their  contributions  shall 
be  eligible  for  reinstatement  on  paying  to  the  Retirement  Board, 
in  a  manner  to  be  determined  by  that  Board,  an  amount  equal 
to  the  sum  withdrawn. 


14  RETIREMENT  ALLOWANCES.  [Jan. 

XL    Expense  of  Administration. 

The  expense  necessary  to  the  administration  of  this  act  (exclu- 
sive of  the  payment  of  retirement  allowances)  shall  be  met  from 
appropriations  for  this  purpose  made  annually  by  the  Legislature 
on  the  basis  of  estimates  furnished  by  the  Retirement  Board. 

XII.  Expenditures  for  Annuities. 

The  expenditures  for  the  annuities  provided  for  in  this  act  shall 
be  met  from  the  deposit  reserve  fund  composed  of  the  contribu- 
tions of  members  of  retirement  association,  legacies,  gifts  and 
other  receipts,  together  with  interest  thereon. 

XIII.  Expenditures  for  Pensions. 

The  expenditures  for  pensions  called  for  by  this  act  shall  be 
met  from  appropriations  for  this  purpose  made  annually  by  the 
Legislature  on  the  basis  of  estimates  furnished  by  the  Retirement 
Board. 

XIV.     Custody  of  Funds. 

All  funds  held  subject  to  the  order  of  the  Retirement  Board 
shall  be  kept  in  the  custody  of  the  Treasurer  of  the  Common- 
wealth. He  shall  invest,  subject  to  the  approval  of  the  Retire- 
ment Board,  so  much  of  such  portions  of  such  funds  as  is  deemed 
expedient,  and  shall  make  such  investments  in  accordance  with 
the  requirements  of  the  laws  relating  to  savings  bank  investments. 

XV.     Taxation,  etc. 

(a)  Funds  held  subject  to  the  direction  of  the  Retirement  Board 
and  invested  in  personal  property  shall  be  exempt  from  taxation. 
(6)  Equities  in  the  deposit  reserve  fund  shall  be  exempt  from  tax- 
ation, assignment,  insolvency,  etc.  ' 

XVI.    Duties  of  School  Committees. 

School  committees  shall,  as  directed  by  the  Retirement  Board 
make  deductions  from  the  salaries  of  teachers  in  their  employ  to 
meet  the  assessments  required  by  this  act. 


1913.]  HOUSE  — No.  1926.  15 

XVII.    Duties  of  Town  or  City  Treasurer. 
The  treasurer  of  any  town  or  city  shall  transmit  to  the  Board 
of  Retirement  the  amounts  deducted  by  school  committees  under 
the  provisions  of  this  act. 

XVIII.    Repeal. 

All  acts  or  parts  of  acts  providing  for  the  payment  of  retire- 
ment allowances  to  teachers  out  of  the  proceeds  of  money  raised 
by  local  taxation  in  cities  or  to^wns  are  hereby  repealed,  in  so 
far  as  they  apply  to  the  teachers  designated  by  this  act. 

IV. 

ADDITIONAL  PROVISIONS  FOR  OTHER  CLASSES  OF  TEACHERS. 

Teachers  not  included  in  the  provisions  of  the  proposed  act  (as 
given  in  Appendix  A  and  analyzed  above)  may  be  divided  into 
the  following  classes  from  the  point  of  view  of  a  teachers'  retire- 
ment system :  — 

(a)  Those  under  thirty  years  of  age  at  the  time  such  system 
goes  into  operation  and  who  have  already  begun  work  in  the  public 
schools. 

(6)  Those  already  in  service  who  are  over  thirty  years  of  age 
and  under  sixty  years  of  age  at  the  time  that  the  act  takes  effect. 

(c)  Those  already  in  service  who  are  over  sixty  years  of  age  at 
the  time  the  act  takes  effect. 

(d)  All  teachers,  a  portion  of  whose  service  has  been  in  schools 
outside  the  State,  or  who  shall  have  entered  the  service  for  the 
first  time  after  thirty  years  of  age. 

In  order  that  the  general  act  herein  proposed  for  teachers  here- 
after entering  service  and  under  thirty  years  of  age  might  be 
extended  so  as  to  be  applicable  to  the  other  classes  of  teachers 
described  above,  while  at  the  same  time  conforming  as  far  as 
possible  to  the  general  principles  approved  in  this  report,  the 
following  modifications  and  additions  would,  among  others,  be 
necessary :  — 

1.  In  order  that  teachers  in  service  and  under  thirty  years  of 
age  could  be  included,  a  section  should  be  added  providing  for  vol- 


16  RETIREMENT  ALLOWANCES.  [Jan. 

untary  membership  in  the  retirement  association  of  such  teachers 
as  should  elect  it,  providing  such  teachers  should  waive  any  rights 
that  might  have  accrued  in  other  retirement  associations  supported 
by  public  funds. 

2.  In  order  that  teachers  already  in  service  and  over  thirty 
years  and  under  sixty  years  of  age  could  be  included,  there  should 
be  added  sections  providing:  — 

(a)  For  voluntary  membership  in  the  retirement  association. 
(6)  Waiver  of  rights  accrued  in  other  associations  supported  in 
whole  or  in  part  by  public  funds. 

(c)  For  determining  the  number  of  years  during  which  such 
member  must  make  contributions  to  the  annuity  fund  before 
becoming  eligible  to  an  annuity. 

(d)  For  minimum  pensions  based  on  (1)  service  to  be  rendered 
after  assuming  membership;   (2)  service  already  rendered  prior  to 
assuming  membership. 

3.  In  order  that  teachers  already  in  the  service  and  over  sixty 
years  of  age  might  be  included,  sections  should  be  added,  provid- 
ing for  — 

(a)  Voluntary  membership  in  the  retirement  association. 
(6)  W^aiver  of  accrued  rights  in  other  associations  supported  in 
Whole  or  in  part  by  public  funds. 

(c)  Determining  the  number  of  assessments  before  eligibility  to 
retirement  allowance  is  secured. 

(d)  Fixing  the  minimum  pension. 

4.  Expediency  requires  that  adequate  provision  should  be  made 
for  recognition  of  service  outside  the  State  as  contributing  to 
eligibility.     Provision  should  also  be  made  whereby  persons  becom- 
ing teachers  in  the  public  schools,  after  the  age  of  thirty,  should 
be  in  some  form  eligible  to  membership  in  the  retirement  asso- 
ciation. 

•  If  desired  by  the  Legislature  or  committees  thereof,  the  Board 
is  prepared  to  submit  bills  containing  modifications  and  additions 
suggested  above. 


1913.]  HOUSE  — No.  1926.  17 

V. 

PROBABLE  COST  TO  THE  COMMONWEALTH  or  A  COMPLETE  SYS- 
TEM OF  PENSIONS  ($150  EACH)  FOR  THE  TEACHERS  OF  MASSA- 
CHUSETTS. 

I.  Subject  to  the  elements  of  uncertainty  and  to  the  assump- 
tions discussed  below,  it  may  be  roughly  estimated  that  the  prob- 
able cost  to  the  State  of  providing  for  every  teacher  reaching  the 
age  of  sixty  a  pension  of  $150  a  year  would  be,  for  the  periods 
indicated,  as  follows :  — 

(a)  For  the  period  1914-20  an  average  of  not  less  than  $75,000 
per  year  nor  more  than  $120,000  per  year. 

1.  For  394  teachers  now  in  service  and  over  sixty  years  of  age 
an  average  of  $60,000  per  year. 

2.  For  410  teachers  now  in  service  and  ranging  in  age  from 
fifty-six  to  sixty  years,  an  average  of  $41,000  per  year. 

These  estimates  are  based  on  the  returns  shown  in  Appendix  E. 

(6)  For  the  period  1920-30  an  average  of  not  less  than  $150,000 
per  year  nor  more  than  $300,000  per  year. 

(c)  For  the  period  1930-50  not  less  than  $250,000  per  year  nor 
more  than  $400,000  per  year. 

II.  To  obtain  the  above  rough  approximations  of  probable 
cost  to  the  State,  exclusive  of  the  expenses  of  administration,  of 
the  system  of  pensions  for  teachers,  the  following  assumptions  are 
made:- 

(a)  That  all  teachers  would  elect  to  become  members  of  the 
retirement  association  and  so,  if  remaining  to  the  age  of  sixty, 
eligible  to  pension. 

Obviously,  this  estimate  is  excessive.  Approximately  one-third 
of  the  teachers  of  Massachusetts  are  now  members  of  retirement 
associations  from  which  they  would  doubtless  not  resign.  Fur- 
thermore, young  teachers  now  in  the  service  would  in  many 
instances  at  least  refuse  to  become  members,  and  assume  the 
obligation  of  paying  contributions. 

(6)  That  the  proportion  of  teachers  remaining  in  the  profession 
until  eligible  for  retirement  would  remain  substantially  as  at 
present. 

Of  14,570  teachers  now  in  the  service  of  the  schools  of  the  State, 
submitting  data,  approximately  8  per  cent,  were  from  fifty -one  to 


18  RETIREMENT  ALLOWANCES.  [Jan. 

sixty  years  of  age;  17  per  cent,  from  forty-one  to  fifty  years  of 
age;  30  per  cent,  from  thirty-one  to  forty;  and  43  per  cent,  under 
thirty  years  of  age.  In  addition  to  these,  249  were  from  sixty- 
one  to  sixty-five  years  of  age;  117  from  sixty-six  to  seventy  years 
of  age  and  28  from  seventy-one  years  of  age.  Of  the  teachers 
under  sixty  years  of  age  it  is  assumed  that  approximately  1  per 
cent,  would  annually  become  eligible  for  a  retirement  allowance, 
having  reached  sixty  years  of  age. 

(c)  That  all  teachers  reaching  the  age  of  sixty  would  retire  at 
that  age. 

(d)  That  the  life  expectancy  of  teachers  at  sixty  years  of  age 
is  the  same  as  that  for  all  classes  of  people  at  that  age,  namely, 
13.4  years. 

III.  It  is  obviously  impossible  to  estimate  with  any  degree  of 
accuracy  the  probable  cost  to  the  Commonwealth  of  a  complete 
retirement  system,  involving  the  principle  of  contribution  and 
including  all  classes  of  teachers,  for  the  following,  among  other 
reasons : — 

(a)  Membership  in  a  retirement  association  would  of  necessity 
be  voluntary  for  all  classes  of  teachers  except  those  hereafter 
entering  the  service.  It  is  impossible  to  estimate  the  number  of 
teachers  who  would  elect  to  assume  the  obligations  of  such  a  retire- 
ment system  as  that  proposed  in  this  report. 

1.  About  one-third  of  the  teachers  of  the  State,  including  those 
in  Boston,  are  now  members  of  local  retirement  systems  which, 
it  is  asserted,  are  more  favorable  to  members  than  the  one  herein 
proposed. 

2.  Young  teachers  are  frequently  indifferent  to  the  provision 
of  retirement  allowances,  and  are  unwilling  to  pay  the  assessments 
that  might  be  required  for  an  annuity  fund. 

(6)  The  rate  of  assessment,  as  fixed  by  the  Retirement  Board, 
would  determine,  subject  to  the  minimum  amount  of  the  annuity, 
in  the  case  of  teachers  making  thirty  or  more  payments,  the  amount 
of  the  pension  to  be  paid  by  the  State. 

1.  The  minimum  annual  assessment  suggested  in  the  report  is 
$35,  since  calculations  show  that  such  an  assessment  paid  for 
thirty  years,  the  proceeds  being  invested  at  compound  interest 
at  3  per  cent,  would  purchase  for  a  teacher  retiring  at  the  age  of 
sixty  an  annuity  of  about"  $150;  life  expectancy  being  based  on 


1913.]  HOUSE  — No.  1926.  19 

currently  accepted  mortality  tables  at  13.4  years  for  a  person 
sixty  years  of  age. 

2.  The  Board  has  made  no  recommendations  as  to  the  amount 
of  pension  which  should  be  paid  to  teachers  who  cannot  be  ex- 
pected, on  account  of  their  age,  to  make  thirty  annual  payments 
to  the  annuity  fund. 


APPENDICES. 


A.  —  PROPOSED  ACT  PROVIDING  RETIREMENT  ALLOWANCES  FOR  TEACHERS 

ENTERING  THE  SERVICE  AFTER  JULY   1,    1914. 

B.  —  TABLES  SHOWING  PENSIONS  PAID  TO  TEACHERS  IN  THE  ELEMENTARY 

AND  SECONDARY  SCHOOLS  IN  EUROPEAN  COUNTRIES.      (BASED  ON 
REPORTS  MADE  BY  THE   BUREAU  OF  EDUCATION,   WASHINGTON.) 

C.  —  COMPARATIVE  TABLES  OF  STATE  COMPULSORY  INSURANCE  SYSTEMS 

FOR  TEACHERS  IN  THE  UNITED  STATES. 

D.  —  TABLE  ANALYZING  TEACHERS'  RETIREMENT  SYSTEMS  IN  VARIOUS 

STATES  OF  THE  UNION. 

E.  —  TABLES  ARRANGED  TO  SHOW  NUMBER  OF  TEACHERS  UNDER  VARIOUS 

AGE  AND  SALARY  GROUPINGS  IN  MASSACHUSETTS   JUNE,  1911. 
TABLE  1.    WHOLE  STATE. 
TABLE  2.    BOSTON. 
TABLE  3.    CITIES  OUTSIDE  BOSTON. 
TABLE  4.    TOWNS  OF  5,000  INHABITANTS  AND  UPWARDS. 
TABLE  5.    TOWNS  OF  LESS  THAN  5,000  INHABITANTS. 

F.  —  DESCRIPTION  OF  THE  RETIREMENT  SYSTEM  FOR  MASSACHUSETTS 

STATE  EMPLOYEES.     (FROM  A  DOCUMENT  PUBLISHED  BY  THE 
STATE  TREASURER.) 


APPENDIX  A. 


AN   ACT  TO    ESTABLISH   A   RETIREMENT    SYSTEM   FOR  TEACHERS. 

Be  it  enacted,  etc.,  as  follows: 

CONSTRUCTION. 

1  SECTION  1.     The  following  words  and  phrases  as  used  in  this 

2  act,  unless  a  different  meaning  is  plainly  required  by  the  context, 

3  shall  have  the  following  meanings :  — 

4  (1)  "Retirement   system"   shall   mean   the   arrangement   pro- 

5  vided  in  this  act  for  payment  of  annuities  and  pensions  to  teachers. 

6  (2)  "Annuities"   shall  mean  payments   for  life  derived  from 

7  contributions  from  teachers. 

8  (3)  "Pensions"   shall   mean   payments   for   life   derived   from 

9  contributions  from  the  commonwealth. 

10  (4)  "Teacher"  shall  mean  any  teacher,  principal,  supervisor 

11  or  superintendent  employed  by  a  school  committee  or  board  of 

12  trustees  in  a  day  public  school  within  the  commonwealth. 

13  (5)  "Public   school"   shall   mean   any   day   school   conducted 

14  within  this  commonwealth  under  the  order  and  superintendence 

15  of  a  duly  elected  school  committee  and  also  any  day  school  con- 

16  ducted  under  the  provisions  of  chapter  four  hundred  and  seventy- 

17  one  of  the  acts  of  the  year  nineteen  hundred  and  eleven. 

18  (6)  "Regular  interest"  shall  mean  interest  at  three  per  cent. 

19  per  annum,  compounded  annually  on  the  last  day  of  December 

20  of  each  year. 

21  (7)  "Retirement  board"  shall  mean   the  teachers'  retirement 

22  board,  as  provided  in  section  four  of  this  act. 

23  (8)  "Retirement  association"  shall  mean  the  teachers'  retire- 

24  ment  association,  as  provided  in  section  three  of  this  act. 

25  (9)  "Expense  fund"  shall  mean  the  fund  provided  for  in  para- 

26  graph  numbered  one  in  section  five  of  this  act. 

27  (10)  "Annuity  fund"   shall   mean   the  fund   provided  for  in 

28  paragraph  numbered  two  in  section  five  of  this  act. 

29  (11)  "Pension  fund"  shall  mean  the  fund  provided  for  in  para- 

30  graph  numbered  three  in  section  five  of  this  act. 


24  .  RETIREMENT  ALLOWANCES.  [Jan. 

31  (12)  "School  year"  shall  mean  the  twelve  months  from  the 

32  first  day  of  July  of  any  year  to  the  thirtieth  day  of  June  next 

33  succeeding. 

34  (13)  "Assessments"  shall  mean  the  annual  payments  to  the 

35  annuity  fund  by  members  of  the  association. 

ESTABLISHMENT   OF  A   TEACHERS'   RETIREMENT   SYSTEM. 

1  SECTION  2.     A  teachers'  retirement  system  shall  be  established 

2  on  the  first  day  of  July,  nineteen  hundred  and  fourteen. 

TEACHERS'  RETIREMENT  ASSOCIATION. 

1  SECTION  3.     A  teachers'  retirement  association  shall  be  organ- 

2  ized  among  the  teachers  in  the  public  schools  as  follows :  — 

3  All  teachers  not  over  thirty  years  of  age  who  enter  the  service 

4  of  the  public  schools  for  the  first  time  on  or  after  July  first,  nine- 

5  teen  hundred  and  fourteen,  shall  become  thereby  members  of  the 

6  association. 

STATE  TEACHERS'  RETIREMENT  BOARD. 

1  SECTION  4.     (1)  The   management   of   the   retirement   system 

2  is  hereby  vested  in  the  teachers'  retirement  board  consisting  of 

3  seven   members;  the   insurance   commissioner   for   the   common- 

4  wealth,  the  bank  commissioner  for  the  commonwealth,  the  com- 

5  missioner  of  education  for  the  commonwealth,   three  members 

6  of  the  retirement  association  and  one  other  person.     Upon  organ- 

7  ization  of  the  retirement  association  the  members  thereof  shall 

8  elect  from  among  their  number  in  a  manner  to  be  approved  by 

9  the   insurance    commissioner,    the   bank    commissioner   and    the 

10  commissioner  of  education,  three  persons  to  serve  upon  the  retire- 

11  ment  board,  one  member  to  serve  for  one  year,  one  for  two  years 

12  and  one  for  three  years,  and  thereafter  the  members  of  the  retire- 

13  ment  association  shall  elect  annually  from  among  their  number 

14  in  a  manner  to  be  approved  by  the  retirement  board  one  person 

15  to  serve  upon  the  retirement  board  for  the  term  of  three  years. 

16  The  seventh  member  of  the  retirement  board  shall  be  elected 

17  annually  by  the  other  six  to  serve  for  the  term  of  one  year.     On 

18  a  vacancy   occurring   on   the   board,  a  successor  of  such  person 

19  whose  place  has  become  vacant  shall  be  chosen  in  the  same  man- 

20  ner  as  his  predecessor  to  serve  until  the  next  annual  election. 

21  Until  the  organization  of  the  retirement  association  and  the  elec- 

22  tion  of  three  representatives  therefrom,  the  insurance  commis- 

23  sioner,  the  bank  commissioner  and  the  commissioner  of  education 

24  shall  be  empowered  to  perform  the  duties  of  the  retirement  board. 


1913.]  HOUSE  — No.  1926.  25 

25  (2)  The  members  of  the  retirement  board  shall  serve  without 

26  compensation,   but  they  shall  be  reimbursed  from  the  expense 

27  fund  of  the  retirement  association  for  any  expenditures  or  loss 

28  of  salary  or  wages  which  they  may  incur  through  serving  on  the 

29  board.     All  claims  for  reimbursement  on  this  account  shall  be 

30  subject  to  the  approval  of  the  governor  and  council. 

31  (3)  The  retirement  board  shall  have  power  to  make  by-laws 

32  and  regulations  not  inconsistent  with  the  provisions  of  this  act; 

33  and  to  employ  a  secretary  and  clerical  and  other  assistance. 

34  (4)  The  retirement  board  shall  provide  for  the  collection  and 

35  deposit  of  the  assessments  provided  fo*r  in  this  act;  and  for  the 

36  payment  of  retirement  allowances  and  such  other  expenditures 

37  as  are  required  by  the  provisions  of  this  act. 

38  (5)  The  retirement  board  shall  adopt  for  the  retirement  system 

39  one  or  more  mortality  tables  and  shall  determine  what  rates  of 

40  interest  shall  be  established  in  connection  with  such  tables  and 

41  may  later  modify  such  tables  or  prescribe  other  tables  to  repre- 

42  sent  more  accurately  the  expense  of  the  retirement  system  or  may 

43  change  such  rates  of  interest  and  may  determine  the  application 

44  of  the  changes  made. 

45  (6)  The  retirement  board  shall  perform  such  other  functions 

46  as  are  required  for  the  execution  of  the  provisions  of  this  act. 

CREATION   OF   FUNDS. 

1  SECTION  5.     The  funds  of  the  retirement  system  shall  con- 

2  sist  of  an  expense  fund,  an  annuity  fund  and  a  pension  fund. 

3  (1)  The  expense  fund  shall  consist  of  such  amounts  as  shall 

4  be  appropriated  by  the  general  court  from  year  to  year  on  esti- 

5  mates  submitted  by  the  retirement  board  to  defray  the  expense 

6  of  the  administration  of  this  act,  exclusive  of  the  payment  of 

7  retirement  allowances. 

8  (2)  The  annuity  fund  shall  consist  of  assessments  paid  by  mem- 

9  bers   of   the  retirement   association,   and   interest   derived   from 

10  investments  of  the  annuity  fund.    Each  member  of  the  retire- 

11  ment  association  shall  pay  into  the  annuity  fund,  by  deduction 

12  from  his  salary  in  the  manner  provided  in  section  nine,  paragraph 

13  five,  of  this  act,  such  assessments  upon  his  salary  as  may  be  de- 

14  termined  by  the  retirement  board.     The  rate  of  assessment  shall 

15  be  established  by  the  retirement  board  on  the  first  day  of  July 
16'  of  each  year  after  at  least  three  months'  notice,  and  shall  at  any 

17  given  time  be  uniform  for  all  members  of  the  retirement  associa 

18  tion,  and  shall  not  be  less  than  three  per  cent,  nor  more  than 


26  RETIREMENT  ALLOWANCES.  [Jan. 

19  seven  per  cent,  of  the  member's  salary:  provided,  however,  that 

20  when  the  total  sum  of  assessments  on  the  salary  of  any  member 

21  at  the  rate  established  by  the  retirement  board  would  amount 

22  to  more  than  one  hundred  dollars  or  less  than  thirty-five  dollars 

23  for  any  school  year,  such  member  shall  in  lieu  of  assessments  at 

24  the  regular  rate  be  assessed  one  hundred  dollars  a  year  or  thirty- 

25  five  dollars  a  year  as  the  case  may  be,  payable  in  equal  instal- 

26  ments  to  be  assessed  for  the  number  of  months  during  which  the 

27  schools  of  the  community  in  which  such  member  is  employed 

28  are  commonly  in  session. 

29  Any  member  of  the  retirement  association  who  shall  for  thirty 

30  years  have  paid  regular  assessments  to  the  annuity  fund  as  pro- 

31  vided   herein,    shall   be   exempt   from   further   assessments;  but 

32  such  member  may  thereafter,  if  he  so  elects,  continue  to  pay  his 

33  assessments  to  the  fund. 

34  (3)  The  pension  fund  shall  consist  of  such  amounts  as  shall 

35  be  appropriated  by  the  general  court  from  time  to  time  on  esti- 

36  mates  submitted  by  the  retirement  board  for  the  purpose  of  pay- 

37  ing  the  pensions  provided  for  in  this  act. 

PAYMENT   OF   RETIREMENT   ALLOWANCES. 

1  SECTION  6.     (1)  Any   member   of   the   retirement    association 

2  who  shall  have  taught  in  the  public  schools  for  at  least  thirty 

3  school  years,  and  who  shall  have  made  regular  payments  to  the 

4  annuity  fund  as  provided  in  this  act  for  not  less  than  thirty  school 

5  years,  may,  on  attaining  the  age  of  sixty-five,  elect  to  retire  from 

6  service  in  the  public  schools;  or,  if  incapacitated,  may  be  retired 

7  by  the  school  committee  of  the  city  or  town  in  which  he  is  at  that 

8  time  employed,  at  the  discretion  of  the  school  committee. 

9  (2)  Any  member  of  the  retirement  association  who  shall  have 

10  taught  in  the  public  schools  for  at  least  thirty  school  years,  and 

11  who  shall  have  made  regular  payments  to  the  annuity  fund  as 

12  provided  in  this  act  for  not  less  than  thirty  school  years,  shall, 

13  on  attaining  the  age  of  seventy,  be  retired  from  service  in  the 

14  public  schools. 

15  (3)  Any  member  of  the  retirement  association  electing  or  re- 

16  quired  to  retire  from  service  in  the  public  schools  under  the  pro- 

17  visions  of  this  act  shall  receive  in  quarterly  instalments  from  the 

18  annuity  fund  during  the  remainder  of  his  life  after  retirement 

19  the  annuity  to  which  his  entire  contributions  to  such  fund,  together 

20  with  regular  interest  thereon,  shall  entitle  him  according  to  the 

21  annuity  tables  of  the  retirement  board. 


1913.]  HOUSE  — No.  1926.  27 

22  (4)  Any   member   of  the  retirement  association  receiving  an 

23  annuity  as  provided  in  this  act  shall  receive  a  pension,  equal  in 

24  amount  to  his  annuity,  to  be  paid  from  the  pension  fund  as  di- 

25  rected  by  the  retirement  board;  provided,  that  no  pension  shall 

26  in  any  one  year  exceed  five  hundred  dollars. 

WITHDRAWAL  AND   REINSTATEMENT. 

1  SECTION  7.     (1)  Any   member   of   the   retirement   association 

2  withdrawing  from  service  in  the  public  schools  before  completing 

3  thirty  years  of  service  therein  shall  receive  from  the  annuity  fund 

4  all  amounts   contributed   as   assessments,   together  with  regular 

5  interest  thereon,  in  the  manner  hereinafter  provided. 

6  (2)  If  such  withdrawal  shall  take  place  before  the  completion 

7  of  ten  years  of  service  in  the  public  schools,  the  total  amount 

8  to  which  such  member  is  entitled  as  determined  by  the  retirement 

9  board  under  the  provisions  of  this  act  shall  be  paid  to  him  in  four 

10  annual  instalments. 

11  (3)  If  such  withdrawal  shall  take  place  after  ten  years  of  service 

12  the  amount  so  refunded  shall  be  in  the  form  of  such  annuity  for 

13  life  based   on   the  contributions  of  such  member,  together  with 

14  regular  interest  thereon,  as  may  be  determined  by  the  retirement 

15  board  according  to  its  annuity  tables,  or  in  four  annual  instal- 

16  ments,  as  such  member  may  elect. 

17  (4)  If  a  member  of  the  association  retiring  and  receiving  pay- 

18  ments  in  accordance  with  paragraphs  numbered  (2)  and  (3)  of 

19  this  section,  shall  die  before  the  amount  of  such  payments  equals 

20  the  amount  of  his  contributions  to  the  annuity  fund  with  regular 

21  interest,  the  difference  between  the  amount  of  such  payments 

22  and  the  amount  of  his  contributions  with  regular  interest  shall 

23  be  paid  to  his  legal  representatives. 

24  (5)  Any  member  of  the  retirement  association  who  shall  have 

25  withdrawn  from  service  in  the  public  schools  shall,  on  being  re- 

26  employed  in  the  public  schools,  be  reinstated  in  the  retirement 

27  association  in  accordance  with  such  plans  for  reinstatement  as 

28  the  retirement  board  shall  adopt. 

29  (6)     If  a  member  of  the  retirement  association  shall  die  before 

30  having  completed  thirty  years  of  service  in  the  public  schools 

31  and  no  payments  having  been  made  as  specified  in  paragraph 

32  numbered  (4)  of  this  section,  the  full  amount  of  his  contributions 

33  to  the  annuity  fund  with  regular  interest  shall  be  paid  to  his  legal 

34  representatives. 


28  RETIREMENT  ALLOWANCES.  [Jan. 


TAXATION,   ATTACHMENTS   AND   ASSIGNMENTS. 

1  SECTION  8.     That  portion  of  the  salary  or  wages  of  a  member 

2  deducted  or  to  be  deducted  under  this  act,  the  right  of  a  member 

3  to  an  annuity  or  pension,  and  all  his  rights  in  the  funds  of  the 

4  retirement  system  shall  be  exempt  from  taxation,  and  from  the 

5  operation  of  any  laws  relating  to  bankruptcy  or  insolvency,  and 

6  shall  not  be  attached  or  taken  upon  execution  or  other  process 

7  of  any  court.     No  assignment  of  any  right  in  or  to  said  funds 

8  shall  be  valid.     The  funds  of  the  retirement  system,  so  far  as  they 

9  are  invested  in  personal  property,  shall  be  exempt  from  taxation. 

DUTIES   OF   THE   SCHOOL   COMMITTEE. 

1  SECTION  9.     (1)  The  school  committee  of  each  town  and  city 

2  in  the  commonwealth  shall  before  employing  in  any  teaching 

3  position  any  person  to  whom  this  act  may  apply  notify  such  per- 

4  son  of  his  duties  and  obligations  under  this  act  as  a  condition 

5  of  his  employment. 

6  (2)  On  or  before  October  first  of  each  year  the  school  com- 

7  mittee  of  each  town  and  city  in  the  commonwealth  shall  certify 

8  to  the  retirement  board  the  names  of  all  teachers  to  whom  this 

9  act  applies. 

10  (3)  The  school  committee  of  each  town  and  city  in  the  com- 

11  monwealth  shall  notify  the  retirement  board  of  the  employment 

12  of   new   teachers,   removals,   withdrawals,   changes   in   salary   of 

13  teachers,  within  ten  days  after  such  employment,  removal,  with- 

14  drawal  or  change  in  salary. 

15  (4)  Under   the  direction  of  the  retirement  board  the  school 

16  committee  of  each  town  or  city  in  the  commonwealth  shall*  furnish 

17  such  other  information  as  the  board  may  require  relevant  to  the 

18  discharge  of  the  duties  of  the  board. 

19  (5)  The  school  committee  of  each  town  and  city,  in  the  com- 

20  monwealth  shall,   as  directed  by  the  retirement  board,  deduct 

21  from  the  amount  of  the  salary  due  each  teacher  employed  in  the 

22  public  schools  of  such  city  or  town  such  amounts  as  are  due  as 

23  contributions  to  the  annuity  fund  as  prescribed  in  this  act,  and 

24  shall  send  to  the  treasurer  of  said  town  or  city  a  statement  as 

25  voucher  for  such  deductions,  and  shall  send  a  duplicate  statement 

26  to  the  secretary  of  the  retirement  board. 

27  (6)  The  school  committee  of  each  town  and  city  in  the  common- 

28  wealth  shall  keep  such  records  as  the  retirement  board  may  require. 


1913.]  HOUSE  — No.  1926.  29 


DUTIES   OF   BOARDS   OF   TRUSTEES. 

1  SECTION  10.     In  administering  this  act  for  teachers  in  schools 

2  conducted  in  accordance  with  chapter  four  hundred  and  seventy- 

3  one  of  the  acts  of  the  year  nineteen  hundred  and  eleven,  the  boards 

4  of  trustees  of  said  schools  are  hereby  authorized  and  required  to 

5  perform  all  the  duties  prescribed  for  school  committees  under 

6  this  act. 

CUSTODY  AND   INVESTMENT   OF   FUNDS. 

1  SECTION  11.     (1)  The  treasurer  of  each  town  or  city  in  the 

2  commonwealth  on  receipt  from  the  school  committee  or  board 

3  of  trustees  of  the  voucher  for  deductions  from  the  teachers'  salaries 

4  provided  for  in  section  nine  shall  transmit  monthly  the  amounts 

5  specified  in  such  voucher  to  the  treasurer  of  the  commonwealth. 

6  (2)  The  treasurer  of  the  commonwealth  shall  send  to  the  secre- 

7  tary  of  the  retirement  board  monthly,  a  statement  of  all  money 

8  transmitted  to  him  by  the  treasurers  of  the  different  towns  and 

9  cities  under  the  provision  of  paragraph  (1)  of  this  section. 

10  (3)  All  funds  of  the  retirement  system  shall  be  in  custody  and 

11  charge  of  the  treasurer  of  the  commonwealth  and  the  treasurer 

12  shall  invest  such  funds  as  are  not  required  for  current  disburse- 

13  ments  in  accordance  with  the  laws  of  the  commonwealth  govern- 

14  ing  the  investment  of  funds  of  savings  banks.     He  may,  when- 

15  ever  he  sells  securities,  deliver  the  securities  so  sold  upon  receiving 

16  the  proceeds  thereof,  and  may  execute  any  or  all  documents  neces- 

17  sary  to  transfer  the  title  thereto. 

18  (4)  The  treasurer  of  the  commonwealth  shall  make  such  pay- 

19  ments  to  members  of  the  retirement  association  from  the  annuity 

20  fund  and  pension  fund  as  the  retirement  board  shall  order  to  be 

21  paid  in  accordance  with  sections  six  and  seven  of  this  act. 

22  (5)  On  or  before  the  third  Wednesday  in  January,  the  treasurer 

23  of  the  commonwealth  shall  file  with  the  insurance  commissioner 

24  for  the  commonwealth,  and  with  the  secretary  of  the  retirement 

25  board,  a  sworn  statement  exhibiting  the  financial  condition  of 

26  the  retirement  system  on  the  thirty-first  day' of  the  preceding 

27  December  and  its  financial  transactions  for  the  year  ending  at 

28  such  date.     Such  statement  shall  be  in  the  form  prescribed  by  the 

29  retirement  board  and  approved  by  the  insurance  commissioner. 


30  RETIREMENT  ALLOWANCES.  [Jan. 


MEMBERSHIP  IN  OTHER   RETIREMENT  ASSOCIATIONS. 

1  SECTION  12.     No  member  of  the  retirement  association  shall 

2  be  eligible  to  participation  in  the  benefits  of  any  other  teachers' 

3  retirement  system  supported  in  whole  or  in  part  by  funds  raised 

4  by  taxation. 

JURISDICTION   OF   COURT. 

1  SECTION  13.     The   superior   court   shall   have   jurisdiction   in 

2  equity  upon  petition  of  the  insurance  commissioner  or  of  any 

3  interested  party  to  compel  the  observance  and  restrain  the  viola- 

4  tion  of  this  act,  and  of  the  rules  and  regulations  established  by 

5  the  retirement  board  hereunder. 

1      SECTION  14.    This  act  shall  take  effect  upon  its  passage. 


1913.] 


HOUSE  — No.  1926. 


31 


APPENDIX  B 


TABLE  1.  —  PENSIONS  PAID  TO  TEACHERS  OF  ELEMENTARY  SCHOOLS  IN 

EUROPE. 

[Bureau  of  Education  Report,  1902,  pp.  2370  and  2371.] 


COUNTRIES  OR  STATES. 

Paid  by 
State  or  Com- 
munity. 

Dues  paid 
by  Teachers, 
Per  Cent,  of 
Salary. 

Pension 
may 
begin 
after 

(Years)- 

Minimum 
Amount 
paid, 
Per  Cent, 
of  Last 
Salary. 

Retire- 
ment 
takes 
Place 
after 
(Years)— 

Maximum 
Amount  paid, 
Per  Cent,  of 
Last  Salary. 

German  Empire:  — 

*.. 

Prussia, 

Both,     . 

None, 

10 

25 

45 

75  per  cent. 

Bavaria, 

Community,  . 

Yes,1  . 

5 

25 

45 

75  per  cent. 

Wurt  tern  berg, 

State,     . 

None, 

10 

40 

45 

85  per  cent. 

Saxony, 

Both,      . 

None, 

10 

30 

40 

80  per  cent. 

Baden,  .... 

Both,      . 

None, 

10 

30 

45 

75  per  cent. 

Hesse,    .... 

Both,      . 

None, 

10 

45 

45 

100  per  cent. 

Mecklenburg-Schwerin, 
Mecklenburg-Strelitz,  . 

Communities, 
Crown,  . 

None, 
None, 

20 

_3 

_2 
_3 

50 

-3 

90  per  cent. 

Oldenburg,    . 

State  and 

2  per  cent. 

10 

40 

45 

80  per  cent. 

community. 

Saxe-Weimar, 

Both,      . 

None, 

(?) 

(?) 

37 

80  per  cent. 

Brunswick,    . 

Both,      . 

None, 

5 

33* 

50 

100  per  cent. 

Anhalt, 

Both,      . 

None, 

5 

33* 

50 

100  per  cent. 

Saxe-Altenburg,    . 

Both,      . 

None, 

10 

34 

45 

86  per  cent. 

Saxe-Coburg-Gotha,      . 

Both,      . 

None, 

10 

40 

40 

100  per  cent. 

Saxe-Meiningen,    . 

Both,      . 

None, 

10 

60 

50 

100  per  cent. 

Reuss  (senior  line), 

Both,      . 

2  per  cent. 

10 

40 

45 

80  per  cent. 

Reuss  (junior  line), 
Schwarzburg-Sondersh, 

Both,      . 
Both,      . 

2  per  cent. 
None, 

10 
10 

40 
40 

45 

48 

80  per  cent. 
80  per  cent. 

Schwarzburg-Rudolst,  . 
Lippe-Detmold,    . 

Both,      . 
Both,     . 

None, 
None, 

10 
10 

40 
40 

50 
45 

100  per  cent. 
80  per  cent. 

Schaum  burg-Lippe  , 

Both,     . 

None, 

•       10 

30 

45 

80  per  cent. 

Waldeck, 

Both,      . 

None, 

10 

33* 

45 

66§  per  cent. 

Bremen, 

Community,  . 

None, 

10 

40 

45 

80  per  cent. 

Lubeck, 

Community,  . 

None, 

10 

33* 

35 

75  per  cent. 

Hamburg, 

Community,  . 

None, 

10 

40 

40 

80  per  cent. 

Alsace-Lorraine,    . 

State  and 

None, 

10 

25 

40 

75  per  cent. 

community. 

Austria,     .... 

Both,      . 

_4 

10 

33* 

40 

100  per  cent. 

Hungary, 

Both,      . 

(?) 

(?) 

(?) 

40 

$150-$200. 

Switzerland, 

_5 

_ 

_ 

Denmark, 

Both,      . 

(?) 

10 

10 

45 

66|  per  cent. 

Norway,  .... 

State,6   . 

_ 

_ 

_ 

_ 

Sweden,    .... 

State,  «   . 

None, 

(?) 

(?) 

30 

75  per  cent. 

Netherlands,    . 

State,6   . 

None, 

(?) 

?) 

40 

66|  per  cent. 

Belgium  

Communities, 

3  per  cent. 

12 

(?) 

30 

(?) 

France,     . 

State,     . 

None, 

(?) 

?) 

25 

50  per  cent. 

Italy  

State,7   . 

None, 

(?) 

(?) 

30 

(?) 

Great  Britain, 

State,     . 

$15  +  $1.25 

10 

_8 

35 

$100  for  each 

for  each  10 

year  after  10 

per    cent. 

years    of 

of  increase 

service. 

of  salary. 

1  In  Bavaria  the  dues  paid  by  teachers  vary  considerably  in  the  different  parts  of  the  Kingdom,  i.e., 
between  $1.25  in  central  Franconia  and  $25  in  lower  Palatinate.  Also  initiation  fees  are  paid. 

Lowest  amount  of  salary. 

At  pleasure  of  the  Crown. 

In  some  crown  lands  of  Austria  dues  are  paid  by  teachers. 

In  Switzerland  the  cantonal  governments  are,  as  a  rule,  opposed  to  pensioning  teachers.  Where  it  is 
done,  it  is  the  result  of  local  agreement.  The  teachers  themselves  maintain  annuity  funds. 

InNorway  pensions  are  paid  to  all  teachers,  but  each  case  is  individually  decided  by  Parliament. 

In  Italy  the  State  pension  fund  is  not  large.    Hence  private  annuity  funds  are  numerous. 

See  last  column. 

GENERAL  NOTES.  —  The  foregoing  statements  have  reference  to  men  teachers.  Women  teachers  are 
retired,  on  an  average,  ten  years  earlier,  and  their  pensions  amount  to  about  10  to  20  per  cent,  less  than 
those  of  the  men. 

In  most  German  States  the  communities  (or  the  State)  make  a  single  relief  payment  if  a  teacher  is 
disabled  before  he  reaches  the  end  of  the  tenth  year  of  service,  i.e.,  the  lower  age  limit.  The  same  practice 
prevails  in  Austria  and  a  few  other  countries. 


32 


RETIREMENT  ALLOWANCES. 


[Jan. 


TABLE  2.  —  PENSIONS   PAID   TO    TEACHERS  OF  SECONDARY   SCHOOLS   IN 

EUROPE. 


COUNTRIES  OR  STATES. 

Paid  by 
State  or  Com- 
munity. 

Dues  paid 
by  Teachers, 
Per  Cent,  of 

Salary. 

Pension 
begins 
after 
(Years)— 

Minimum 
Amount 
paid 
Per  Cent, 
of  Last 
Salary. 

Retire- 
ment 
takes 
Place 
after 
(Years)— 

Maximum 
Amount  paid, 
Per  Cent,  of 
Last  Salary. 

German  Empire:  — 

Prussia, 

Both, 

None, 

10 

25 

40 

75  per  cent. 

Bavaria, 

Both,      . 

None, 

4 

70 

100  per  cent. 

Saxony, 

Both,      . 

None, 

10 

30 

40 

80  per  cent. 

Wurttemberg, 

Both,      . 

None, 

10 

40 

Baden  

Both,      . 

None, 

10 

30 

40 

75  per  cent. 

Hesse  

Both,      . 

None, 

5 

40 

50 

100  per  cent. 

Mecklenburg-Schwerin, 
Saxe-  Weimar, 

Both,      . 
Both,      . 

None, 
None, 

20 
1 

50 
40 

50 
36 

90  per  cent. 
80  per  cent. 

Oldenburg,    . 

Both,      . 

None, 

50 

50 

90  per  cent. 

Brunswick,    . 
Saxe-Meiningen,    . 

Both,      . 
Both,     . 

None, 
None, 

3 
1 

33* 
45 

50 
40 

100  per  cent. 
75  per  cent. 

Saxe-Altenburg,    . 
Saxe-Coburg-Gotha,     . 

Both,     . 
Both,     . 

3  per  cent., 
1  per  cent., 

1 
1 

25 
40 

40 
40 

80  per  cent. 
100  per  cent. 

Anhalt, 
Schwarzburg-Rudolst, 
Schwarzburg-Sondersh, 

Both,      . 
Both,      . 
Both,      . 

None, 
None, 
None, 

1 
1 
1 

40 
40 

49 
36 
37 

100  per  cent. 
80  per  cent. 
80  per  cent. 

Waldeck, 

Both,      . 

None, 

1 

33* 

26 

66f  per  cent. 

Reuss  (senior  line), 

Both, 

None, 

1 

40 

37 

80  per  cent. 

Reuss  (junior  line), 
Schaumburg-Lippe, 
Lippe-Detmold,    . 

Both,     . 
Both,     . 
Both,      . 

None, 
None, 
None, 

1 
10 
1 

40 
30 
40 

45 
37 
37 

80  per  cent. 
80  per  cent. 
80  per  cent. 

Lubeck, 

Both,     . 

None, 

10 

35 

75  per  cent. 

Bremen, 

Both,      . 

None, 

1 

40 

30 

80  per  cent.  ' 

Hamburg, 

Both,     . 

None, 

1 

40 

50 

100  per  cent. 

Alsace-Lorraine,    . 

Both,      . 

None, 

10 

25 

40 

75  per  cent. 

Austria,    .... 

Both,      . 

None, 

8 

30 

100  per  cent. 

Hungary, 
Switzerland, 

Both, 

_2 

None^ 

10 

40 

30 

100  per  cent. 

Denmark, 
Norway,  .... 

_3 

(') 

10 

10 

45 

66|  per  cent. 

Sweden  

State, 

None,' 

10 

(?) 

30 

$900.  ' 

Netherlands,    . 

Both,      . 

_B 

30 

66f  per  cent. 

Belgium,  .... 

State,     . 

None, 

(?) 

(?) 

30 

66|  per  cent. 

France,     .... 

State,     . 

10  per  cent., 

(?) 

(?) 

30 

66§  Per  cent. 

Spain, 

_6 

_6 

_6 

_6 

_6 

_6 

Portugal,  . 

Both,     . 

10  per  cent., 

10 

25 

100  per  cent. 

Italy  

_7 

_7 

_7 

_7 

—  7 

_7 

Greece,  s    .... 

State,     . 

7$  per  cent., 

(?) 

(?) 

20 

40  per  cent. 

Russia  

_9 

_9 

_9 

_9 

_9 

_9 

Great  Britain, 

_10 

_10 

_10 

-10 

-10 

_10 

1  In  Wurttemberg  the  pensions  may  reach  92£  per  cent,  in  cases  where  the  salary  is  not  higher  than 
$600.    The  rate  of  increase  is  1$  per  cent.;  as  high  as  85  per  cent,  with  salaries  over  $600.    No  pension  can 
exceed  $1,500. 

2  The  population  is  not  favorably  inclined  to  paying  pensions  to  teachers  or  other  civil  officers.    Where 
it  is  done,  it  is  the  result  of  local  agreement. 

3  In  Denmark  each  case  is  decided  by  the  minister  of  education,  but  usually  according  to  the  scheme 
indicated  in  the  table. 

*  Each  case  is  decided  by  Parliament. 

8  In  the  Netherlands  the  teacher  pays  one  year's  salary  into  the  pension  fund  within  the  first  five  years 
of  service. 

6  In  Spain  the  State  pays  two-fifths  of  salary  for  two  years  after  twenty  years  of  service ;  three-fifths  of 
salary  after  twenty-five  years,  and  four-fifths  of  salary  after  thirty-five  years  of  service,  but  only  for  two 
years. 

7  In  Italy  teachers  may  retire  from  service  on  account  of  ill  health,  and  still  draw  one-half  or  three- 
fourths  of  their  salaries,  according  to  the  length  of  service. 

8  In  Greece  an  addition  of  one-fiftieth  of  the  salary  is  paid  for  each  additional  year  of  service,  over  and 
above  the  40  per  cent,  paid  after  twenty  years. 

9  In  Russia  the  pensions  are  not  uniform;    they  range  between  300  and  400  rubles  after  twenty-five 
years  of  service. 

10  In  Great  Britain  a  few  distinguished  schools,  such  as  Eton,  pay  pensions;  the  majority  of  secondary 
schools,  being  private  institutions,  do  not  pay  pensions  to  teachers. 


1913. 


HOUSE  — No.  1926. 


33 


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34 


RETIREMENT  ALLOWANCES. 


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1913.] 


HOUSE  — No.  1926. 


35 


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36 


RETIREMENT  ALLOWANCES. 


[Jan. 


APPENDIX  D. 


PENSION  SYSTEMS  OF  THE  PUBLIC 


STATE  OR  COM- 
MUNITY AND  YEAR 
ESTABLISHED. 

Paid  by  State 
or  Community. 

Paid  in 
Part 
by  State. 

Dues  paid  by 
Teachers,  Per  Cent, 
of  Salary. 

PENSION  BEGINS  — 

With 
Disability 
(Years). 

Without 
Disability 
(Years). 

California  (all  cities),  . 

Community, 

No, 

Yes,  i  .... 

15  V,4 

30 

San  Francisco 

Community, 

No.  . 

$12  per  year  day  and 

152,3,4 

30' 

(1897).  6 

$6  for  evening. 

Colorado  :       D  e  n  v  e  r 

Community, 

No,    .       . 

None, 

10 

25  9 

(1909). 

Connecticut:        New 

Community, 

No,    .       . 

1  per  cent,  less  than  10 

15 

30 

Haven  (1911). 

years;    2    per    cent. 

over  10  years. 

Illinois      (cities      over 

Community, 

No,  . 

$5  to  $30,  i    . 

15 

25 

100,000). 

Chicago  (1895), 

Community,10    . 

No,  . 

$5  to  $30,  i    . 

159,  11 

25  9 

Indiana:    Indianapolis 

Community,12   . 

No,  . 

1  per  cent,  for  15  years 

15 

25  » 

(1907). 

and    under;     maxi- 

mum $10;  2  per  cent. 

over  15  years;  maxi- 

mum $20. 

Kentucky:     Louisville 

Community, 

No,  . 

1  .  2  per  cent,  of  salary, 

20 

30 

(1912). 

Maryland  (1904),  ™ 

State, 

Wholly,    . 

None, 

25 

25 

Massachusetts,    except 

Community, 

No,  . 

None, 

25 

25^ 

Boston  (1908)." 

Boston  (1908)  :  — 

Pension  fund, 

Community, 

No,  . 

None, 

30  »i 

SOW 

Teachers'       retire- 

Community,20    . 

No,  . 

$18  per  year, 

2" 

30  21 

ment        fund 

(1900). 

Lynn,  16     . 

Community, 

No,  . 

None, 

25 

25" 

Michigan  :    Detroit 

Community,  23  . 

No,  . 

1  per  cent.  ,  24 

20  « 

25-30  w 

(1895). 

i  Act  mandatory  upon  all  teachers  entering  service  after  it  takes  effect. 

1  Fifteen  years'  teaching  in  municipality. 

1  Proportionate  annuity  to  incapacitated  teachers  who  have  been  contributors  for  at  least  five  years. 

4  Must  have  paid  in  at  least  five  years'  dues. 

6  A  permanent  fund  of  $50,000. 

•  Fund  administered  by  commission  (mayor,  superintendent  and  county  treasurer,  who  report 
biannually).  The  retirement  commission  consists  of  five  teachers,  one  at  least  from  principals,  one  from 
grammar  section,  elected  for  three  years. 

7  With  30  years'  assessments. 

8  A  proportionate  annuity  between  15  and  25  years. 

9  Three-fifths  of  service  within  municipality  or  district. 

1°  Fund  administered  by  Board  of  Education,  two  members  elected  by  Board    two  teachers  elected 
by  contributors,  and  the  superintendent  of  schools  ex  officio, 

11  A  proportionate  annuity  under  30  years  with  disability. 

12  For  cities  of  100,000  or  more  inhabitants. 


1913.] 


HOUSE  — No.  1926. 


37 


APPENDIX    D. 


SCHOOLS  IN  THE  UNITED  STATES. 


Author- 
ized by 
State 
Law. 

Minimum  Sum 
paid. 

Maximum  Sum 
paid. 

Other  Sources  of 
Revenue. 

Refunds. 

Yes,     . 

$360  in  counties,  $600 
in  consolidated  cities 

$360  in  counties,  $600 
in  consolidated  cities 

Fines,    donations  and 
miscellaneous 

None. 

and  counties. 

and  counties.       *•' 

sources.  5 

Yes,     . 

$600,  .... 

$600,8 

Gifts,  legacies  and  not 

None. 

less    than    one-half 

the    sums    forfeited 

by      teachers'      ab- 

sences. 

Yes,      . 

As  Board  determines, 

$480,  .... 

Tax  of  1-10  of  1  mill; 

None. 

gifts. 

Yes,      . 

$400  

$800,     .... 

Appropriation  by 

_                       _ 

school  board. 

Yes,      . 

$400,  .... 

$400  

Gifts,  legacies,     . 

Resigning,      one-half; 

discharged,  total. 

Yes,      . 

$400  

$400  

Gifts,  legacies,  interest 

Resigning,      one-half; 

on  school  fund. 

discharged,  total. 

Yes,      . 

$15  for  each  year  of 

$600  

1  cent  in  $100  taxable 

Retiring    teacher    re- 

service. 

property;  donations; 

ceives     one-half 

interest  on  fund.  l4 

amount    p  aid    into 

fund;    legatee,  one- 

Yes,      . 

$200  

$400,  .... 

City       appropriation, 

half  compensation. 
One-half  amount  paid 

gifts,  legacies. 

in. 

Yes,      . 

$200  

$200,  .         .         ... 

None, 

- 

Yes,      . 

Not    exceeding    one- 

$500  

Gifts,  city  fund,  direct 

_ 

half  salary  upon  re- 

taxation,    absences, 

tirement. 

etc. 

Yes,      . 

$312,  .... 

$600,  .... 

Interest,    on    annuity 

_                       _ 

fund,     5     cents    on 

$1,000. 

- 

$180,22 

$180,22 

Salary  of  custodian  and 

Resigning,       one-half 

clerk     hire,     $1,500, 

after  2  years'  mem- 

paid by  school  com- 

bership. 

mittee. 

Yes,      . 

Not    exceeding    one- 

$500  

Gifts,  city  fund,  direct 

- 

half  salary  on  retire- 

taxation,      absence, 

ment. 

etc. 

Yes,      . 

$400  

$400,  .... 

Gifts,  legacies,  money 

Resigning,  one-half. 

appropriated  by  the 
Board  or  raised  by 

approval       of      the 

common   council, 

fees  of  nonresidents, 

balance  from  teach- 

ers' salaries. 

Four-fifths  time  teaching  within  city. 

Any  unexpended  balance  of  the  annuity  fund  is  transferred  to  permanent  fund  annually. 

Must  be  60  years  old,  of  exemplary  character  and  without  means  of  support. 

Also  Nahant,  Winchester,  Brookline,  Pittsfield,  Wellesley,  Marion. 

If  60  years  old. 

Board  may  retire  those  65  years  old. 

19  Two-thirds  service  in  city. 

20  Salary  of  custodian  of  fund  and  clerk  hire,  $1,500;  paid  by  school  committee. 

21  One-third  service  in  city. 

22  Total  one-third  salary  within  these  limits. 

23  The  board  of  trustees  consists  of  the  president  of  the  Board  of  Education,  the  president  pro  tempore 
of  the  Board  of  Education,  the  chairman  of  committee  on  teachers  and  scnools,  the  superintendent  of 
city  schools,  and  three  teachers  in  city  schools  elected  by  ballot  from  those  contributing  to  retirement 
fund,  as  the  Board  shall  prescribe,  for  a  term  of  three  years,  one  teacher  being  elected  each  year. 

24  Limit,  $1,000. 

25  Ten  years  of  which  in  city. 


38 


RETIREMENT  ALLOWANCES. 


[Jan. 


PENSION  SYSTEMS  OF  THE  PUBLIC 


STATE  OR  COM- 
MUNITY AND  YEAR 
ESTABLISHED. 

Paid  by  State 
or  Community. 

Paid  in 
Part 
by  State. 

Dues  paid  by 
Teachers,  Per  Cent, 
of  Salary. 

PENSION  BEGINS  — 

With 
Disability 
(Years). 

Without 
Disability 

(Years). 

Minnesota:  — 
Duluth  (1910),i 

Community, 

No,  . 

$10  to  $25,    . 

20 

30 

Minneapolis  (1909),  . 

St.  Paul  (1909), 

Nebraska:      Omaha 
(1909). 

Community, 

Community, 
Community, 

No,  . 

No,  . 
No,  . 

5  years  and  under,  $10; 
5  to  10  years,  $20;   10 
to  30  years,  $25.  2 
1  per  cent.  ;  maximum, 
$25. 
1  to  \y-i  per  cent.,7 

2 

5« 
25  « 

203 

25» 
35-40  • 

New  Jersey  (1896),  en- 
tire State:  — 
Teachers'  retirement 
fund. 

Community, 

No,  . 

2  to  3  percent.,8,9      . 

20 

25-35  >o 

New  Jersey  (1903)  en- 
tire State:  — 
Teachers'    pension 
fund. 

Community,      . 

No,  . 

None, 

20" 

35" 

New  York  (1911), 

State, 

Yes, 

1  per  cent,  of  salary,  . 

15 

25 

Albany  (1907), 

Community,      . 

No,  . 

1  per  cent., 

20 

30  » 

Buffalo  (1896), 

Community, 

No,  . 

1  to  2  per  cent.,  . 

24-28 

30-35  1*.  '» 

Elmira  (19C7),  . 

Greater    New    York 

(1894). 

Community, 
Community, 

No,  . 
No,  . 

1  per  cent.;  maximum, 
$12. 
1  per  cent.,  l7 

20V8 

30  '« 
30  s,  '8 

Rochester  (1905),      . 

Community, 

No,  . 

2  per  cent., 

25-20  l«,  * 

35-30  '«,  w 

Schenectady  (1907),  . 

Community, 

No,  . 

\Y<i    per    cent.,    maxi- 
mum. 

25-2015,  l8 

35-30^,18 

Syracuse  (1897), 

Community,      . 

No,  . 

1  per  cent., 

- 

35-30  '5,  is 

Troy  (1906),      . 

Community, 

No,  . 

1  per  cent., 

37 

Cities  of  10,000  inhabitants. 
Ten  years  of  which  in  city. 

Any  contributions  unpaid  are  paid  in  lump  sum  or  deducted  from  annuity. 

Proportionate  annuity  to  incapacitated  teachers  who  have  been  contributors  for  at  least  five  years. 
Board  may  retire  those  65  years  old. 
Twenty  years  within  city. 
Payments  cease  when  $500  are  paid  in. 

Fund  administered  by  Board  of  Education,  two  members  elected  by  Board,  two  teachers  elected 
by  contributors,  and  the  superintendent  of  schools  ex  officio. 
»  Maximum,  $50. 


1913.]  HOUSE  — No.  1926. 

SCHOOLS  IN  THE  UNITED  STATES  —  Con. 


39 


Author- 
ized by 
State 
Law. 

Minimum  Sum 
paid. 

Maximum  Sum 
paid. 

Other  Sources  of 
Revenue. 

Refunds. 

Yes,      . 

$333.33, 

$500  

One-tenth  mill  on  all 

Discharge,     all     pay- 

taxable property 

ments  ;    resigning, 

Yes,      . 

$16.66%  for  each  year 

$500,  . 

gifts. 
One-tenth  mill  on  tax- 

one-half payment. 
Discharged,  total;   re- 

of service. 

able  property;  inter- 

signing, one-half;  all 

est  on  fund. 

to  legatee. 

Yes,      . 

$480,2 

$480  

One-tenth  mill  on  tax- 

Not specified. 

able  property. 

Yes,      . 

$500, 

$500  

Gifts;  \V-i  times  teach- 

None. 

*•• 

ers'   contributions 

and    not    less    than 

required    sum;     in- 

terest on  fund. 

Yes,      . 

S250.il 

$650," 

(1)  Donations;  (2)  1  per 

None. 

Six-tenths  of  average 

Six-tenths  of  average 

cent,  of  annuities;  (3) 

annual  pay  for  last 

annual  pay  for  last 

interest  on  annuity 

5  years. 

5  years. 

fund.       State    pays 

administration      ex- 

penses. 

Yes,      . 

One-half    of    average 

One-half   of   average 

Board  of  education  of 

annual    salary    for 

annual    salary    for 

city  pays  all  annui- 

last 5  years. 

last  5  years. 

ties. 

Yea,      . 

One-half  pay  at   re- 

One-half   pay  at   re- 

State     appropriation, 

No  provision. 

tirement  not  to  ex- 

tirement not  to  ex- 

gifts, legacies. 

ceed  $600. 

ceed  $600. 

Yes,      . 

One-half  average  an- 

$600   

3  per  cent,  excise  mon- 

All if  discharged. 

nual  pay  for  last  5 

eys;  interest;  teach- 

years. 

ers'  absences;  dona- 

tions. 

Yes,      . 

One-half  pay  allowed 

$800  

Appropriation       not 

All  if  discharged. 

on  retirement. 

over  amount  paid  by 
teachers;  donations; 

interest. 

Yes,      . 

One-half  average  an- 

$400, .... 

Appropriation,    $2,000 

Three-fourths. 

Yes,      . 

nual  pay  last  5  years. 
$600,   one-half  salary 

$1,500  to  $2,000,  19 

per  year;  interest. 
(1)  Fines,  deductions; 

All  if  discharged. 

upon  retirement. 

(2)  legacies,  gifts;  (3) 

5  per  cent,  annually 

of  all  excise  moneys, 

or  fees  from  liquor 

licenses. 

Yes,      . 

Half  of  pay  at  retire- 

$800   

An  amount  equal   to 

All  if  discharged. 

ment. 

teachers'     contribu- 

tions,   from    Board  ; 

donations;  interest. 

Yes,      . 

$350  

$450  

Amount  equal  to  V/z 

Three-fourths    if    dis- 

per   cent,    teachers' 

charged. 

pay       roll  ;        from 

liquor  tax. 

Yes,      . 

One-third  pay  at  re- 

$800, .... 

Deductions     teachers' 

All  if  discharged. 

tirement. 

absences;    dona- 

tions; interest. 

- 

One-half   pay  at  re- 

$800   

5  per  cent,  excise;    de- 

All if  discharged. 

tirement. 

ductions      teachers' 

absences;    dona- 

tions; interest;  bal- 

ance annually  from 

salaries. 

Act  mandatory  upon  all  teachers  entering  service  after  it  takes  effect. 

Women,  20;  men,  25. 

Must  have  paid  in  at  least  the  sum  of  one  annuity. 

Twenty  years  within  State. 

Four-fifths  time  teaching  within  city. 

Women  less  number  of  years  than  men. 

If  65  years  old. 

Maximum,  $40. 

Fifteen  years'  teaching  in  municipality. 

$1,500  principal;  $2,000  supervisor. 


40 


RETIREMENT  ALLOWANCES. 


[Jan. 


PENSION  SYSTEMS  OF  THE  PUBLIC 


PENSION  i 

JEGINS  — 

STATE  OR  COM- 
MUNITY AND  YEAR 

ESTABLISHED. 

Paid  by  State 
or  Community. 

Paid  in 
Part 
by  State. 

Dues  paid  by 
Teachers,  Per  Cent, 
of  Salary. 

With 
Disability 
(Years). 

Without 
Disability 
(Years). 

New  York:  —  Con. 
Yonkers  (1908), 

Community, 

No,  . 

1  per  cent., 

- 

30-25' 

Ohio  

Community, 

No,  . 

$20  per  annum,2 

203 

303 

Cincinnati  (1897),     . 

Community, 

No,  . 

$20  per  year, 

203 

303 

Cleveland  (1906),      . 

Community, 

No,  . 

$20  per  year, 

203 

30' 

Columbus  (1909),      . 

Community, 

No,  . 

$20  per  year, 

20' 

30' 

Springfield  (1908),     . 

Community,      . 

No,  . 

$2C  per  year, 

203 

30' 

Pennsylvania:  Harris- 
burg  (1908). 

Community, 

No,  . 

2  to  3  per  cent.,4 

55' 

30  6 

Philadelphia,    . 
Pittsburg  (1908), 

Community, 
Community, 

No,  . 
No,  . 

1    per    cent,    first    10 
years;  afterwards,  2 
per  cent.  4 
$20  per  year, 

307-56 
10  » 

30» 
30"> 

Rhode    Island,    entire 
State. 

Providence  (1897),    . 

State, 
No,    . 

Wholly,    . 
No,  . 

None, 
1  per  cent.,  maximum, 

35  8," 

10 

35  8," 
35-30  * 

South     Carolina: 
Charleston. 

Utah-   Salt  Lake  City 

Community, 
No, 

No,  . 

No, 

$12. 
None, 

1  per  cent  ,  1S 

20 
30 

25" 
30  V," 

(1909). 

Vermont  (1910),  . 
Virginia:    entire  State 

Community, 

State, 

No,  . 
Yes, 

None, 
1  per  cent,  of  salary,  . 

20 

30« 
30  «,  « 

(1908). 

Wisconsin:    Milwaukee 
(1909).  i« 

Community, 

No,  . 

$24  per  year, 

25" 

25io 

»  Women  less  number  of  years  than  men. 

2  Voluntary. 

3  Three-fifths  of  service  within  municipality  or  district. 

4  Maximum,  $50. 

6  Proportionate  annuity  to  incapacitated  teachers  who  have  been  contributors  for  at  least  five  years. 

8  Twenty  years  within  city. 

7  Ten  years  of  which  in  city, 
s  If  60  years  old. 

9  Proportionate  annuity. 


1913.]  HOUSE  — No.  1926. 

SCHOOLS  IN  THE  UNITED  STATES  —  Con. 


41 


Author- 
ized by 
State 
Law. 

Minimum  Sum 
paid. 

Maximum  Sum 
paid. 

Other  Sources  of 
Revenue. 

Refunds. 

Yes,      . 

One-half  pay  at  time 
of  retirement. 

$800  

5  per  cent,  excises;  de- 
ductions     teachers' 

All  if  discharged. 

absences;    dona- 

tions; interest. 

Yes,      . 

$200  

$300,  .         .  *     . 

Deductions  for  teach- 
ers' absences,   fines, 

Discharge,      one-half; 
resigning,    one-half; 

assessments   of 

legatee,  one-half. 

teachers,    and    from 

». 

1   to  2  per  cent  .  of 

amount  of  taxation. 

Yes,      . 

$200  

$300  

Deductions  for  teach- 

Resigning,     one-half; 

ers'  absences,   fines, 

legatee,  -one-half  . 

assessments  of 

teachers,    and    from 

1  to  2  per  cent,   of 

amount  of  taxation. 

Yes,      . 

$200,  .... 

$3CO,  .... 

1   per  cent,   of  school 

Resigning,      one-half; 

Yes,      . 

$200  

$300  

tax;  interest. 
1   per  cent,   of  school 

legatee,  one-half. 
Resigning,      one-half; 

tax;  interest. 

legatee,  one-half. 

Yes,      . 

$200  

$300  

1  to  2  per  cent,  school 

Resigning,      one-half; 

tax;  interest. 

legatee,  one-half. 

Yes,      . 

One-half   pay  at  re- 

$800   

Amount    from    Board 

None. 

tirement. 

equal     to     teachers' 

contributions. 

Yes,      , 

$400  

$800  

Sum       from       Board 

All  if  discharged. 

equals  teachers'  con- 
tributions. 

Yes,      . 

$400  

$400  

Donations;  interest,   . 

Resigning,      one-half; 

legatee,  one-half. 

Yes,      . 

One-half  average  an- 

$500, .... 

None, 

_                       _ 

nual    salary    for    5 

years  preceding. 

Yes,      . 

Half    pay    at    retire- 

$600   

Donations  ;    entertain- 

None. 

ment. 

ments;  interest. 

Yes,      . 

One-half  salary  on  re- 

$250   

10  per  cent,  for  first  5 

None. 

tirement. 

years,    then    4    per 

cent,  of  school  tax. 

Yes,      . 

One-half  average  an- 

None, 8       . 

Deductions     for     ab- 

Refunds all   to  lega- 

nual   salary    for    5 

sences;      gifts,      be- 

tee;    resigning     re- 

years preceding. 

quests,      donations, 
legacies. 

ceives     one-half    of 
contributions;     dis- 

charged receives  to- 

tal amount. 

Yes,      . 

As  voted,  . 

As  voted,  . 

School  money,     . 

None. 

Yes,      . 

One-half  average  an- 

$500   

Legacies;  bequests,     . 

None. 

nual    salary    for    5 

years  preceding. 

Yes,      . 

$400,  .         . 

$400,  .... 

1   per  cent,   of  school 

Resigning  teacher  re- 

tax. 

ceives   total   contri- 

bution;    discharged 

receives     total 

amounts  ;  legatee  re- 

ceives total  amount. 

10  Fifteen  years'  teaching  in  municipality. 

11  Twenty-five  years  within  State;  15  years  immediately  preceding  within  State. 

12  Board  may  retire  those  60  years  old. 

1 3  Act  mandatory  upon  all  teachers  entering  service  after  it  takes  effect. 

14  With  30  years'  assessments. 

15  If  50  years  (women);  58  years  (men). 

16  Cities  of  50,000  inhabitants  or  more. 

17  A  proportionate  annuity  between  15  and  25  years, 
is  If  65  years  old. 


42 


RETIREMENT  ALLOWANCES. 


[Jan. 


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1913.] 


HOUSE  — No.  1926. 


43 


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RETIREMENT  ALLOWANCES. 


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1913.1 


HOUSE— No.  1926. 


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RETIREMENT  ALLOWANCES. 


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1913.]       .  HOUSE  —  No.'  1926.  47 

APPENDIX  F. 


DESCRIPTION  OF  THE  RETIREMENT  SYSTEM  FOR  MASSACHUSETTS 
STATE  EMPLOYEES.1 

The  essential  provisions  of  the  retirement  system  may  be  com- 
pactly summed  up  as  follows :  — 

The  plan  is  based  on  the  principle  of  joint  contributions  by  em- 
ployees and  Commonwealth.  The  employees  are  to  be  assessed 
regularly  on  their  wages  and  salaries  at  a  rate  of  not  less  than  1  nor 
more  than  5  per  cent.,  to  provide  a  fund  out  of  which  annuities  shall 
be  paid  to  those  retiring  from  the  service.  Exception  is  made,  how- 
ever, in  cases  of  employees  receiving  more  than  $30  per  week;  such 
employees  are  not  to  be  assessed  on  the  excess  above  that  amount, 
but  simply  on  a  flat  basis  of  $30  per  week.  The  annuity  received 
by  each  employee  retired  under  the  provisions  of  the  act  is  such  an 
amount  as  his  contributions  during  his  period  of  service  accumulated, 
with  interest  at  3  per  cent,  compounded  semiannually,  will  provide  for 
him,  according  to  actuarial  computation.  In  addition  to  the  annuity, 
the  retired  employee  receives  in  each  case  a  pension  of  equivalent 
amount  paid  from  the  State  treasury.  In  no  case  is  the  total  allow- 
ance, including  annuity  and  pension,  to  be  less  than  $200  per  year, 
or  more  than  one-half  of  the  average  wages  or  salary  during  the  ten 
years  prior  to  retirement. 

The  age  of  voluntary  retirement  is  sixty  years,  that  is,  an  employee 
upon  reaching  that  age  may  retire  or  may  be  retired  by  the  Board 
entrusted  with  the  administration  of  the  act.  The  age  of  compul- 
sory retirement  is  seventy  years,  that  is,  an  employee  upon  reaching 
that  age  must  retire  or  be  retired.  An  additional  requirement  of 
fifteen  years'  continuous  service  is  laid  down  for  employees  retiring 
or  retired  at  the  age  of  sixty.  It  should  be  noted,  however,  that  em- 
ployees who  had  reached  the  age  of  sixty  when  the  retirement  system 
was  established,  and  also  employees  who  had  reached  the  age  of 
fifty-five  years  at  that  date  and  became  members  of  the  association, 
may  be  retired  without  having  completed  the  otherwise  required 
service  period  of  fifteen  years.  Employees  who  had  reached  the 
age  of  fifty-five  and  did  not  join  the  association  may  be  retired  with 
the  minimum  allowance  of  $200  prescribed  in  the  act.  Furthermore, 
employees  who  had  served  thirty-five  years  continuously  may  retire 
or  be  retired  at  any  age. 

1  From  a  document  published  by  tbe  State  Treasurer. 


48 


RETIREMENT  ALLOWANCES.        [Jan.  1913. 


In  addition  to  pensions  for  subsequent  service,  pensions  for  prior 
service  are  provided,  that  is,  employees  in  the  service  when  the  retire- 
ment system  is  established  are  to  receive,  in  addition  to  the  allowance 
which  they  may  secure  through  contributions  to  the  annuity  fund 
and  the  pension  of  corresponding  amount  paid  from  the  State  treas- 
ury, an  extra  allowance  equal  to  the  amount  of  the  annuity  that 
they  might  have  earned  for  themselves  had  the  system  been  in  opera- 
tion when  they  entered  the  service,  and  had  they  made  contributions 
to  the  retirement  fund  from  that  date  to  the  time  of  its  establishment. 

Participation  in  the  system  is  optional  for  present  employees. 
It  is  obligatory  for  future  employees,  those  entering  the  service  after 
the  establishment  of  the  system,  with  the  exception  of  officers  elected 
by  popular  vote,  employees  eligible  for  pensions  under  other  acts  of 
the  Legislature,  employees  who  serve  only  for  short  terms  or  on  part 
time,  and  employees  over  fifty-five  years  of  age  at  the  time  of  enter- 
ing the  service. 

Provision  is  made  for  refunding  the  contributions  of  employees 
who  withdraw  from  the  service  for  any  reason  without  becoming 
entitled  to  a  retirement  allowance.  In  case  a  member  of  the  asso- 
ciation leaves  the  employment  for  any  cause  other  than  death,  before 
becoming  entitled  to  a  pension,  there  shall  be  refunded  to  him  all  the 
money  that  has  been  paid  in  by  him,  with  interest  at  3  per  cent.  In 
case  a  member  dies  before  becoming  entitled  to  a  pension,  there  shall 
be  paid  to  his  legal  representatives  all  the  money  that  has  been  paid 
in  by  him,  with  such  interest  as  may  have  been  earned  on  the  deposit. 

The  administration  of  the  system  is  entrusted  to  a  Board  of  Re- 
tirement, consisting  of  the  State  Treasurer,  another  member  chosen 
by  the  retirement  association,  composed  of  participating  employees, 
and  a  third  member  selected  by  the  first  two,  or  appointed  by  the 
Governor  in  case  of  their  failure  to  agree.  The  insurance  depart- 
ment of  the  Commonwealth  is  given  powers  of  supervision  with  refer- 
ence to  the  actuarial  and  administrative  features  of  the  system. 


YC  5756' 


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*OV   271920 


